After Bitcoin fell below $60,000, the market began to question the reasons for the decline. Foreign media quoted Greg Cipolaro, head of research at NYDIG, as saying that this weakness was not triggered by a single event, but rather by multiple pressures acting simultaneously, putting pressure on Bitcoin and the overall crypto market.
Funds shift to AI and new technology stocks
The article argues that AI remains one of the strongest growth narratives in the global market, leading to more direct competition for funding in crypto assets. Cipolaro notes that the overlap between AI and crypto investors is higher than many expected, with both asset classes attracting funds looking to bet on new technologies and high returns. Against the backdrop of AI-related stocks continuing to outperform, there are signs of some funds shifting from the crypto market to the technology sector.
He also pointed out that the market is preparing for a new wave of large-scale tech IPOs. Companies such as SpaceX, OpenAI, and Anthropic are widely regarded as potential listing targets. For institutional investors, large IPOs often mean the need to free up cash and reduce existing positions in advance, which may temporarily weaken the demand for crypto assets.
Industry news amplifies market pressure
In addition to the diversion of funds, several recent industry news items have also exacerbated market sentiment. US Treasury Secretary Scott Bessent stated that the US had seized approximately $1 billion in crypto assets linked to Iran. Although public details are limited, this statement has once again sparked discussions in the market regarding the reach of government law enforcement and the controllability of digital assets.
The risks of quantum computing have returned to the market's spotlight. This is because research suggests that the computational resources required to attack mainstream encryption systems may be declining faster than previously expected. While this risk has not yet translated into a real impact, discussions about it are more likely to amplify risk aversion during periods of weakening prices.
Another frequently mentioned factor is Strategy's sale of 32 bitcoins. In terms of size, this transaction of approximately $2.5 million had little practical impact on market supply, but its symbolic significance was greater. Strategy has been considered one of the most stable corporate buyers of Bitcoin for the past few years. Even a small sale can cause some investors to reassess whether this long-term buying power remains robust.
On-chain metrics are near historical lows.
Despite continued price pressure, Cipolaro believes that on-chain data is approaching a significant bottoming area from the past few cycles.
- Bitcoin's MVRV ratio has dropped to 1.2.
- The proportion of circulating supply in a profitable state has fallen below 50%.
- These two indicators have often appeared during market clearing phases.
However, he also emphasized that the magnitude of this pullback is still lower than that of historical bear markets. According to the data in the article, Bitcoin has fallen by about 53% from its high of approximately $126,000 last October, significantly less than the previous drops of 75% to 90%. In terms of time, this round has lasted about 242 days from the high point, which is also shorter than the nearly one-year process of most previous bear markets from top to bottom.
This means that there may be two explanations for the market: one is that the participation of institutional funds has changed the cyclical characteristics of Bitcoin; the other is that although the current market has completed a clear reset, it has not yet reached a true stage of full clearing.
The article argues that on-chain data does indeed show a significant drop in market valuations, with the bottom approaching. However, whether the bottom has been reached depends on whether institutional demand has fundamentally altered the cyclical structure or merely postponed a deeper correction.
