After Bitcoin fell below $60,000, the market began questioning the reasons for the decline. Foreign media cited Greg Cipolaro, Head of Research at NYDIG, stating that this weakness was not triggered by a single event, but rather by multiple pressures accumulating simultaneously, putting downward pressure on Bitcoin and the broader crypto market.
Funds shift toward AI and new technology stocks
The article argues that AI remains one of the strongest growth narratives in today’s global markets, creating more direct competition for capital in the crypto asset space. Cipolaro notes that the overlap between AI and crypto investors is higher than many expect, as both asset classes attract capital seeking exposure to emerging technologies and high returns. Amid continued outperformance of AI-themed stocks, there are signs of capital shifting from the crypto market to the technology sector.
He also noted that the market is preparing for a new wave of large-scale tech IPOs. Companies such as SpaceX, OpenAI, and Anthropic are widely regarded as potential candidates for public listing. For institutional investors, major IPOs often require pre-allocating cash and reducing existing positions, which may temporarily diminish demand for crypto assets.
Industry news intensifies market pressure
In addition to fund diversion, several recent industry developments have further weighed on market sentiment. U.S. Treasury Secretary Scott Bessent stated that authorities seized approximately $1 billion in cryptocurrency assets linked to Iran. Although public details remain limited, this announcement has reignited discussions in the market about government enforcement reach and the controllability of digital assets.
Quantum computing risks have re-entered the market’s spotlight. This is because research suggests that the computational resources required to attack mainstream encryption systems may be decreasing faster than previously anticipated. Although this risk has not yet materialized into real-world impacts, discussions around it are more likely to amplify risk-off sentiment during periods of price weakness.
Another factor repeatedly mentioned is Strategy’s sale of 32 bitcoins. In terms of volume, this approximately $2.5 million transaction has little practical impact on market supply, but its symbolic significance is greater. Over the past several years, Strategy has been regarded as one of the most consistent corporate buyers of bitcoin. Even a small-scale sale may prompt some investors to reassess whether this long-term buying support remains solid.
On-chain metrics are approaching historical bottom levels.
Despite continued price pressure, Cipolaro believes that on-chain data is nearing important bottom areas seen in previous cycles.
- The Bitcoin MVRV ratio has dropped to 1.2.
- The percentage of circulating supply in profit has fallen below 50%.
- These two indicators were commonly seen during market clearing phases.
However, he emphasized that the magnitude of this pullback remains below that of historical bear markets. According to the data in the article, Bitcoin has declined approximately 53% from its peak of around $126,000 in October last year, significantly shallower than previous declines of 75% to 90%. In terms of duration, this downturn has lasted approximately 242 days since the peak, which is also shorter than most prior bear markets, which typically took close to a year to reach their troughs.
This suggests that the market may be interpreting two possibilities: first, that institutional participation has altered Bitcoin’s cyclical characteristics; second, that although the current market has completed a significant reset, it has not yet reached the stage of full liquidation.
The article concludes that on-chain data indeed shows that market valuation has significantly declined, and the bottom region is drawing near. However, whether the low has been reached still depends on whether institutional demand has fundamentally altered the cycle structure or merely delayed a deeper correction.