The Bitcoin price has plummeted to below $66K, extending its ongoing crash by over 20% in just a month. This downturn can be attributed, in part, to the massive influx of investor capital into artificial intelligence stocks. As a result, liquidity is being drained from the crypto market, amplifying fears of an even deeper correction.
The recent drop comes as US jobs data exceeded expectations, effectively ruling out any potential rate cut by the Federal Reserve this year. This development has sent shockwaves through the financial markets, further exacerbating the bearish sentiment in the crypto space. The Crypto Fear & Greek Index has fallen to 11, indicating extreme fear among investors.
Several key headwinds are driving the Bitcoin crash, including massive spot Bitcoin ETF outflows and US-Iran war escalation. Additionally, funding rates have surged to levels not seen since November 2025, with open interest near yearly highs. The research note 'Summertime Sadness' by K33 Research highlighted the significant capital inflow into AI stocks, which is eroding liquidity from both Bitcoin and the broader crypto market.