Bitcoin slides 2.5% to $63,956 as AI spending fears grip markets

Bitcoin fell to its lowest level in three weeks as a selloff in technology stocks triggered by rising AI capital expenditure concerns spilled into cryptocurrency markets.

Bitcoin fell 2.5 percent to $63,956 on July 25, its lowest level in three weeks, as the Nasdaq-100 dropped to an 11-week low on fears that surging AI spending by hyperscalers will pressure corporate margins.

"Bitcoin is trading as a risk asset, not a hedge, and the macro picture is deteriorating fast," said Nina Volkov, crypto macro analyst at Edgen. "The Nasdaq breakdown is the clearest signal yet that markets are repricing AI optimism into AI anxiety."

Trading volume reached $22.84 billion over the past 24 hours, according to CoinMarketCap data. The selloff accelerated after the Magnificent Seven group of mega-cap tech stocks lost almost $900 billion in market value on July 23, their worst single-day decline since April 2025. Alphabet fell 7 percent after raising its 2026 capital expenditure forecast to as much as $205 billion, while Tesla plunged 15 percent on a profit miss.

The correlation between Bitcoin and the Nasdaq-100 has strengthened in recent months, leaving BTC exposed to further downside if the AI-driven selloff deepens. The next major support level sits near $60,000, a threshold not tested since mid-May. A break below that could open the path toward $55,000, according to technical analysts.

$900 Billion Tech Wipeout Drains Crypto Risk Appetite

The selloff in equities began after Alphabet's July 22 earnings report revealed plans to boost 2026 AI-related capital expenditure to between $195 billion and $205 billion, up from a prior range of $180 billion to $190 billion. The disclosure reignited Wall Street's concern that hyperscaler AI spending is outpacing near-term revenue generation. Tesla's disappointing second-quarter results, which sent its stock down nearly 18 percent for the week, compounded the pressure.

The broader market rout pushed the CBOE Volatility Index up 12.4 percent to 18.70 on July 23, its highest level in two months. Bitcoin's 30-day realized volatility has also crept higher, rising to 42 percent from 36 percent at the start of July, according to data from Coinglass.

Macro Headwinds Compound Crypto Pressure

Beyond tech-specific concerns, a hawkish repricing of Federal Reserve rate expectations is adding to headwinds for risk assets. Traders are now pricing in a 36 percent probability of a rate hike at the Fed's July 28-29 meeting, up from 13 percent a week ago, according to the CME Group's FedWatch tool. The 10-year U.S. Treasury yield hit 4.72 percent on July 23, its highest level since January 2025, before settling near 4.68 percent.

Higher bond yields increase the opportunity cost of holding non-yielding assets like Bitcoin, historically a headwind for crypto prices. The U.S. dollar index was little changed at 101.47.

Open interest in Bitcoin futures across major exchanges stood at $34.2 billion as of 14:00 UTC, down 4 percent from the previous day, Coinglass data shows. Funding rates on Binance and OKX turned slightly negative, indicating that short sellers are paying to maintain positions — a sign of bearish sentiment in the derivatives market.

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