Cryptocurrencies started the shortened US week on the back with bitcoin slipping below $67,000 on Tuesday, falling below its tight weekend range of $68,000-$70,000.
The weakness coincided with a softer opening for US stocks, particularly for the battered software sector. The iShares Expanded Tech-Software Sector ETF ( IGV ) was 3% lower and now 30% below its October high. Software stocks have been under pressure, with improved AI tools seen as a threat to their business models. Markets give opinions, and the current shibboleth says that bitcoin is just software, so if AI is a threat to that sector, it’s also a threat to bitcoin.
Read more: Bitcoin’s correlation with troubled software stocks grows
The broader Nasdaq fell 0.8% and the S&P 500 fell 0.6%.
Meanwhile, the once parabolic rally in precious metals continued to cool. Gold fell 3% to around $4,860 a barrel. ounce, while silver fell another 6%, leaving it about 40% below its late-January peak.
Crypto-related stocks also retreated, giving back some of Friday’s sharp termination. Strategy ( MSTR ), the largest corporate bitcoin holder, fell about 5% with a similar drop for USDC stablecoin issuer Circle ( CRCL ). Bitcoin miners and data center names Riot Platforms (RIOT), MARA, CleanSpark (CLSK), Cipher Mining (CIFR), and TeraWulf (WULF) all fell around 4%-5%.
Krypto in search of a narrative
Paul Howard, senior director at trading firm Wincent, said crypto remains firmly tied to macro sentiment.
“Macro news has been closely correlated with crypto’s risk profile over the past 12 months, and expectations are that macro numbers will remain soft, implying a risk-off trading mentality,” Howard said.
He pointed to the US Supreme Court ruling on tariffs, expected later this week, as a potentially bigger near-term catalyst than routine economic data.
For now, he expects more consolidation as bitcoin and the broader digital asset market search for a new narrative strong enough to pull capital back from AI stocks and commodities.
“Crypto has some work to do in re-establishing itself as an attractive asset class, and the relatively low prices are not attractive enough,” Howard said.
