Bitcoin continued its sharp decline on Wednesday, dropping below the $66,000 level and extending a month-long correction that has erased more than 20% of its value. The latest selloff comes amid growing investor interest in artificial intelligence companies, rising geopolitical uncertainty, and increasing concerns over liquidity leaving the cryptocurrency market.
The world’s largest cryptocurrency fell to an intraday low of $65,422, marking one of its weakest performances in recent months. Market sentiment deteriorated further as the Crypto Fear & Greed Index plunged to 11, signaling extreme fear among investors.
AI Stocks Attract Capital Away From Bitcoin
According to analysts at K33 Research, one of the key factors behind Bitcoin’s recent weakness is the increasing flow of capital into artificial intelligence investments. As investors position themselves for potential public offerings and growth opportunities in the AI sector, liquidity is being redirected away from cryptocurrencies and other risk assets.
The research firm noted that Bitcoin recently recorded its weakest weekly performance since mid-February. Spot Bitcoin ETF inflows have also slowed considerably, with three-week ETF flow data showing one of the weakest periods on record.
K33 Research highlighted that enthusiasm surrounding major AI-related companies, including anticipated IPOs from firms such as SpaceX and Anthropic, has encouraged investors to rotate capital away from the crypto market. The report suggested that this trend is contributing to declining demand for Bitcoin and other digital assets.
Additional Headwinds Pressure Crypto Markets
Several other factors have also weighed on Bitcoin’s price performance. Stronger-than-expected U.S. employment data has reduced expectations for Federal Reserve interest rate cuts, creating additional pressure on risk assets.
At the same time, ongoing geopolitical tensions involving the United States and Iran have increased market uncertainty. Rising concerns over global stability have encouraged investors to move toward safer assets, adding further selling pressure across the cryptocurrency sector.
Market participants are also closely monitoring large Bitcoin transactions linked to Michael Saylor’s Strategy, as well as continued outflows from spot Bitcoin exchange-traded funds. These developments have contributed to heightened volatility and increased liquidation activity throughout the crypto market.
Peter Schiff Warns of a Potential Drop to $20,000
Long-time Bitcoin critic Peter Schiff renewed his bearish outlook following the latest market decline. In a post on social media platform X, Schiff argued that investors remain overly optimistic despite the ongoing correction.
He stated that Bitcoin has not yet reached a market bottom and warned that a break below the $50,000 level could trigger a much steeper decline. According to Schiff, such a move could potentially drive Bitcoin below $20,000 and force many long-term holders to exit their positions.
Schiff also referenced recent actions involving Strategy and its preferred stock offerings, suggesting that additional pressure could emerge if investor confidence weakens further. He maintained that excessive leverage and speculative positioning remain significant risks for the cryptocurrency market.
Bitcoin Faces Critical Test
With investor attention increasingly shifting toward artificial intelligence opportunities, weakening ETF demand, and persistent macroeconomic uncertainty, Bitcoin remains under pressure. Traders are now watching whether support levels can hold or if the market will experience another wave of selling in the coming weeks.
While bullish investors continue to view the correction as temporary, bearish analysts argue that the combination of AI-driven capital rotation, geopolitical risks, and tightening liquidity conditions could keep cryptocurrency prices under pressure for the foreseeable future.
