Two months ago, we said BTC had entered a long consolidation. That is still the right way to read this market, although the range is now under more pressure.
BTC fell below $77K and traded down into the low-$73Ks. The selloff in AI stocks, higher-rate worries, and the cleanup of leveraged longs all added to the move. But this still does not look like a full surrender. Futures traders are reducing risk, while spot buyers are still willing to absorb supply. Open interest and funding have cooled, but they have not been completely washed out.
This looks more like a risk reset than a broken bull market.
We remain bullish over the medium and long term. The odds of a short-term bounce are improving, and this area is worth adding to gradually. We would still split entries, avoid leverage, and leave room for another test lower. Our main risk line below is $70K-$71K. If BTC loses that area and cannot quickly reclaim it, the bullish case becomes much harder. Until then, our approach is simple: stack more, trade less.
What Changed
Macro. The recent AI selloff was first a positioning and liquidity event. Several systematic and leveraged strategies reduced exposure at once, creating a faster price adjustment than the underlying business justified.
The macro backdrop is less comfortable. Growth is still holding up, but inflation has not fully gone away. Higher prices for memory and technology products are beginning to show up in inflation data, while the market is still pricing a meaningful chance of another rate hike. That matters for every asset whose value depends on cash flows far in the future.
This is not a clean rate-cut environment. It is a market where growth remains resilient, inflation is sticky, and liquidity can tighten quickly.
AI. AI demand has not suddenly ended. Spending into 2027 still has strong visibility, supported by GPUs, power agreements, projects already under construction, and data centers that have already received approval.
The risk is moving further out. From 2028 onward, permits, electricity costs, financing, and returns on capital will matter more. The market is no longer asking only whether demand exists. It is asking whether new capacity can be built on time and earn an acceptable return.
The hardware complex is also splitting into two speeds. Current orders for AI servers, memory, power, and data center infrastructure remain strong, while PCs are under pressure from higher memory prices and channel inventory. We continue to prefer companies with real orders, strong balance sheets, and visible cash flow. We are less interested in projects that depend on cheap power, easy permits, or constant access to external financing.
Crypto. The forced cleanup of long leverage amplified the macro selloff. Funding and open interest are both cooler, which leaves the market cleaner than it was a few days ago, but not clean enough to call a confirmed bottom.
ETF flows and broader liquidity remain a headwind. The options activity we have seen is consistent with longer-term buyers still being active, but it is not enough to change the market direction on its own. It is only supporting evidence, not confirmation of a bottom. We keep stacking, but we do not want to chase the first green candle or mistake a bounce for a new uptrend.
