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Oil bounce and lingering AI selloff pushes bitcoin under $64,000
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- DeepHorus
Bitcoin slipped below $64,000 on Monday as the cryptocurrency market faced dual pressures from rising oil prices and a lingering selloff in AI-related stocks. The leading digital asset fell to approximately $63,900, reflecting a 1.3% decline on the day, though it remained up 2% for the week. Other major cryptocurrencies also experienced losses, with ether easing 1.1% to $1,850, BNB falling 0.8% to $564, and XRP slipping to $1.09. Dogecoin lost 1.4%, while Hyperliquid's HYPE token remained the weakest of the majors, down 8% on the week to $60.
The decline comes amid heightened geopolitical tensions following U.S.-Iran strikes that have driven Brent crude oil to a one-month high above $91 per barrel. Simultaneously, the Chinese AI shock that rattled chip stocks on Friday continued to weigh on Asian markets, with South Korea's Kospi dropping 3.5%. These factors have revived inflation concerns that had been temporarily eased by recent soft U.S. price data. The broader market showed a red board across the day, reflecting widespread risk aversion.
The combination of rising energy costs and tech sector volatility creates a challenging environment for risk assets like cryptocurrencies. Investors are now weighing the impact of higher oil prices on inflation expectations, which could influence central bank policies. The AI selloff adds another layer of uncertainty, particularly for sectors reliant on semiconductor stocks. Bitcoin's dip below $64,000 marks a key psychological level that traders are watching closely.
Market participants are closely monitoring the geopolitical situation in the Middle East and its potential to further disrupt energy supplies. Some analysts suggest that Bitcoin's resilience, still up 2% on the week, indicates that the selloff may be contained. However, the continued weakness in altcoins like HYPE points to a cautious sentiment among traders. The crypto market's correlation with traditional risk assets remains elevated.
Looking ahead, the trajectory of Bitcoin and the broader crypto market will depend on developments in oil markets and the recovery of tech stocks. U.S. futures pointed higher on Monday, offering a potential respite, but sustained inflation fears could cap gains. Investors should brace for continued volatility as these factors evolve, with the $60,000 level potentially becoming a new support zone if selling pressure intensifies.
