Macro uncertainties stemming from a nascent AI disruption trade are exacerbating inherent weaknesses within the cryptocurrency market, leading to major digital assets experiencing weekly losses ranging from 8% to 11%. As of Tuesday, Bitcoin is trading at approximately $62,900, reflecting a 2.1% decline on the day and a 7.5% decrease over the week. The asset continues to exhibit a prolonged downward trajectory, remaining trapped in a $60,000 to $70,000 price band formed after a significant market flush on February 5. This range is increasingly perceived not as a stable base but rather as a holding pattern, awaiting a significant catalyst for movement.
Altcoins are underperforming even more dramatically. Ethereum is priced near $1,829, down 8% over the week. XRP has seen a decline of 10.8%, while Solana’s SOL token dropped 11.3%. Dogecoin also fell nearly 10%. This widespread weakness among major cryptocurrencies indicates a diminishing appetite for risk, with interest in Bitcoin itself appearing to wane.
Data from CryptoQuant reveals that sell-side pressure among altcoins has reached five-year highs, suggesting a scenario where holders are distributing their assets in a market characterized by a lack of buyers, particularly outside of larger market caps. This trend of systematic selling often leads to gradual price declines, complicating efforts for momentum traders who usually seek sharper price movements that attract dip buyers.
Market analyst Alex Kuptsikevich of FxPro remarked that Bitcoin’s recent recovery attempts seem more like a period of consolidation rather than a reversal. He highlighted the formation of a bearish pennant on the daily chart and noted that a breach below the mid-$65,000 area would confirm continued downside potential. Conversely, a breakout above $70,000 would invalidate this bearish pattern. He further described the $60,000 to $70,000 range as historically significant—it previously served as a ceiling throughout the entire 2021 market cycle and is now acting as a battlefield between long-term accumulators and newer investors looking to minimize losses.
Adding further pressure to the cryptocurrency market is a broader macroeconomic context influenced by what Citrini Research has termed an “AI scare trade.” This report warned of potential widespread economic disruption across sectors such as delivery, payments, and software due to advancements in artificial intelligence. This knowledge prompted selling in technology-related equities as investors reassessed the impact of AI adaptation on various companies and the risk of displacement for others.
Such sweeping shifts in risk sentiment tend to have a delayed effect on cryptocurrency markets. While digital assets do not always move in tandem with equities, they remain influenced by the same liquidity and positioning dynamics that drive risk-off behavior. Currently, both markets are signaling a generally pessimistic outlook.
Bitcoin now stands 48% below its all-time high reached in October and is down 5.5% from its 2021 peak of $69,000. The longer it remains within this trading range without regaining upward momentum, the more the technical landscape appears to favor bearish sentiment.
