Bitcoin slipped toward the $65,000 level as a broad selloff in artificial intelligence linked technology stocks triggered a wider risk off move across global markets. The decline in equities spilled into digital assets, pulling total crypto market capitalization down roughly 1.25 percent to around $2.27 trillion.
The Nasdaq Composite dropped more than 2 percent as investors reduced exposure to companies heavily associated with AI growth themes. The Dow Jones Industrial Average fell about 1.3 percent, while the S&P 500 lost roughly 1.6 percent. Major technology names including Nvidia, Meta, Amazon and Apple posted notable losses, with Apple falling around 5 percent. Cisco Systems declined more than 12 percent after issuing a weaker profit outlook, despite reporting sales tied to ongoing AI infrastructure demand.
The downturn was not limited to equities. Gold futures fell close to 3 percent as capital rotated into US Treasuries and traditional safe haven currencies such as the US dollar and Swiss franc. The move signaled a defensive posture among investors ahead of key macroeconomic data.
Bitcoin was recently trading near $66,000, down around 1.4 percent over a 24 hour period, with daily trading volume hovering above $44 billion. The decline came as markets prepared for the release of the latest US Consumer Price Index report, which could influence expectations around Federal Reserve rate policy. Weekly jobless claims data showed a smaller than anticipated decline, adding to concerns following a strong January payroll report that indicated the US economy added significantly more jobs than forecast.
The strong labor market backdrop complicates the outlook for rate cuts, particularly if inflation data remains elevated. Higher for longer interest rate expectations typically weigh on risk assets, including growth stocks and cryptocurrencies.
Market data also highlights a tight correlation between crypto assets and major equity benchmarks. The correlation between total crypto market capitalization and Nasdaq linked exchange traded funds has risen above 0.9 in recent sessions, suggesting that movements in technology stocks are being quickly mirrored in digital assets. This high degree of linkage means volatility in the AI sector can directly translate into swings in crypto prices.
Sentiment indicators reflect mounting caution. The crypto fear and greed index has dropped into extreme fear territory, and spot Bitcoin exchange traded fund assets under management have declined over the past month, indicating that institutional flows were already softening before the latest equity selloff. Bitcoin dominance remains near 58 percent, suggesting that weakness is broad based rather than driven by rotation into alternative tokens.
With derivatives open interest elevated, further volatility cannot be ruled out if selling pressure intensifies. Near term direction is likely to hinge on macroeconomic signals and stabilization in technology stocks rather than purely crypto specific narratives.
