Cryptocurrency Market Sees Significant Losses Amid AI Disruption Trade

The cryptocurrency market is experiencing a downturn, with major coins like BTC, ETH, SOL, and XRP posting significant losses in the past week.

According to analysts, the decline can be attributed to two main factors: macro jitters from an emerging AI disruption trade and crypto-native weakness. The 'AI scare trade' has led to a broad risk recalibration, with investors reassessing which companies benefit from AI adoption and which face displacement risk. This trend is likely to impact the cryptocurrency market on a lag.

The technical outlook for bitcoin has shifted towards the bears due to its prolonged failure to break above its current range. A bearish pennant is forming on the daily chart, indicating that a move below the mid-$65,000 area would confirm downside continuation. The $60,000-to-$70,000 range, which acted as the ceiling for the 2021 cycle, now appears to be a battleground between long-term accumulators and newer holders cutting losses.