Bitcoin Hits 6-month Low As AI Fears Add To Risk-off Mood: How Are...

The weakness in the AI sector contributed to the crypto market downturn, as spot BTC ETF outflows and isolated selling sent Bitcoin price to a six-month low.

Bitcoin softened as tech sector weakness spilled into crypto markets, reducing risk appetite and limiting demand for bullish leverage.

Persistent spot Bitcoin ETF outflows and targeted sales from a 2011 holder exacerbated downward pressure.

Bitcoin (BTC) is down 11% since Monday, falling to a six-month low of $94,590 on Friday. Bitcoin derivatives continue to signal weakness, even as several large tech names posted similar declines during the week. Traders are now asking whether the market has already found a floor and what must happen before confidence returns.

The pullback erased $900 million in BTC leveraged long positions, equal to less than 2% of total open interest. Despite the size of that figure, the abrupt price move barely dented the broader market. For comparison, the cascading liquidations on Oct. 10, worsened by very thin liquidity, triggered a 22% drop in BTC futures open interest.

Concerns about upward inflation pressure resurfaced after US President Donald Trump announced his intention to cut tariffs to alleviate high food costs. Mohamed El-Erian, chief economic adviser at Allianz, told Yahoo Finance that recession risks have increased as the “lower ends of the income distribution for households” struggles with the “affordability crunch.” Contagion could spread through the broader economy, El-Erian warned.

The BTC futures premium held near 4% on Friday, unchanged from the prior week. Although still below the 5% neutral line, the metric moved off the 3% lows seen earlier this month. Demand for bullish leverage remains muted, but that does not mean bears hold strong conviction. To gauge whether professional traders expect more downside, it helps to examine their long-to-short ratios.

Whales and market makers increased their long positions at Binance since Wednesday, buying the dip as Bitcoin slid below $100,000. In contrast, OKX whales cut their bullish exposure at a loss after the $98,000 support level failed on Friday. Even so, professional traders appear more optimistic now than they were on Tuesday.

Part of the recent risk market correction was driven by worries in the artificial intelligence sector, which had been a major positive force for stocks. Legendary investor Michael Burry questioned whether lengthening depreciation schedules for computing equipment has artificially

Source: CoinTelegraph