Bitcoin drops toward $60,000 as capital rotates from crypto to AI

Bitcoin fell 3.8% to $66,812.89 as of 14:00 UTC on June 18, extending weekly losses to 12% and a monthly decline of nearly 30%, according to CoinGecko data. The selloff accelerated as capital rotated further into AI-related equities, with the VanEck Semiconductor ETF up 67% this year while BTC remains about 50% below its October record high.

"We've lost the attention of investors to other hot trends, most notably AI," Matt Hougan, chief investment officer at Bitwise, said. "In bear markets, with doubts swirling, it's easier for them to reach for something tangible. Stablecoins and tokenization are more tangible and real-world to most people than bitcoin."

The rotation is visible across multiple data points. Combined crypto exchange volumes fell 3.45% in May to $4.41 trillion, the lowest since September 2024, according to CoinDesk Research. Meanwhile, the Magnificent 7 stocks have also lost momentum, with Microsoft down 33% from its highs and Meta down 28%. Alphabet, Amazon, Microsoft and Meta are expected to spend a combined $725 billion on capital expenditures this year, a 77% increase from last year, with much of that directed at AI infrastructure.

The key support level sits between $65,000 and $64,500, according to TradingView data. A break below that range could open the door to $62,000 or even $60,000, while a defense of $65,000 could trigger a relief rally toward $68,500 to $72,000, given the Relative Strength Index near 31, which signals oversold conditions.

$293 Million in Liquidations Deepen the Selloff

Forced selling amplified the decline. About $293.86 million worth of positions were liquidated across exchanges in the 24 hours through 14:00 UTC, with $229.72 million in long positions and $64.14 million in short positions, according to Coinglass data. Bitcoin alone accounted for $120.36 million in liquidations, and more than 102,788 traders were wiped out.

The Crypto Fear & Greed Index plunged to 11, firmly in Extreme Fear territory, compared with 27 last month, signaling that risk appetite has collapsed among traders.

Institutional Flows Tell a Broader Story

The selloff extends beyond retail positioning. While spot bitcoin ETFs still recorded a net inflow of $166.56 million on June 17, some recent sessions saw strong outflows, with total assets under management standing at $87.75 billion, according to SoSoValue data. The broader trend shows capital exiting both crypto and large-cap tech stocks in favor of AI infrastructure plays. Memory-chip maker Sandisk has surged roughly 800% this year, and Micron Technology has gained about 230%.

Bitwise's Hougan said he still expects bitcoin to reach $1 million in the next 10 years, but acknowledged uncertainty around the timing of the bottom. "I think the coming bull market will be slower and less volatile than in the past," he said.

Ethereum fell 4% to $1,943 during the same period, further weakening confidence across the crypto market.

This article is for informational purposes only and does not constitute investment advice.