Bitcoin slipped toward $63,000 on Tuesday, its lowest level in ten days, as a selloff in AI-linked technology shares spilled over into cryptocurrencies. Traders are pricing roughly a 38% chance of a surprise quarter-point Federal Reserve rate hike this week. Chart analysis points to a possible move down toward $60,500.
Bitcoin slid toward the $63,000 level on Tuesday and hit its lowest in ten days, as a selloff in AI-linked technology shares spilled over into cryptocurrencies while investors braced for a pivotal U.S. Federal Reserve policy decision later this week.
The world's largest cryptocurrency last traded 3% lower at $63,404.8 by 06:33 ET (10:33 GMT), hitting its lowest since July 17. It has struggled to sustain its recovery after rebounding from earlier lows this month, with recent gains undermined by continued outflows from U.S.-listed spot Bitcoin exchange-traded funds.
AI chipmakers drag Asian markets lower
The cryptocurrency selloff coincided with a sharp decline in Asian technology stocks, led by South Korea's KOSPI, which slumped more than 10% as investors dumped AI-related chipmakers. Samsung Electronics and SK Hynix shares fell sharply amid concerns over the sustainability of massive AI infrastructure spending, while intensifying competition from Chinese memory-chip makers further weighed on sentiment.
Attention now turns to a busy week for technology earnings. Results from major AI-focused companies are expected to test whether heavy spending on artificial intelligence infrastructure can continue supporting broader risk appetite.
Traders price a 38% chance of a surprise hike
Market participants also remained cautious ahead of the conclusion of the Federal Reserve's two-day meeting on Wednesday. Traders are pricing in roughly a 38% chance of a surprise quarter-point rate hike this week, while expectations for a September increase have climbed above 80%, according to CME FedWatch.
Higher interest rates tend to reduce the appeal of non-yielding assets such as cryptocurrencies. The market did assess improving geopolitical sentiment, however, after the U.S. and Iran shifted toward diplomatic talks, with both sides holding off attacks since Sunday.
Chart patterns point toward $60,500
Technical signals add to the caution. On the four-hour chart, Bitcoin has fallen through the neckline of a head and shoulders top, perhaps on its way to the full measured move, which Crypto Daily puts at around $60,500.
That decline may not run straight down. The price looks as though it has found support at $63,250, and Crypto Daily notes the next move may well be a bounce that stops short at the neckline before heading back down. On the daily chart, the recent peak stopped just shy of $67K — a lower high than the peak made in mid-June.
Crypto Daily's read of the weekly chart is that the current candle is red and threatening to break down below the $63K support level and the bull market trendline.
Sources: Investing.com, Crypto Daily
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