Bitcoin fell below $64,700 on Thursday, shedding nearly 2% as momentum from the U.S. Senate’s CLARITY Act faded and a surge in oil prices revived inflation fears. The drop erased around $20 billion in market value and triggered $42.3 million in long liquidations. Analysts tie the deeper weakness to capital rotating into AI and to elevated Treasury yields.
Bitcoin dropped nearly 2% to trade below $64,700, erasing around $20 billion in market value in a single session. The token had pushed just over $66,000 before reversing and sliding under $65,000 as legislative momentum stalled and crude oil climbed.
The retreat triggered $42.3 million in long position liquidations, a sharp jump from the $18 million recorded 24 hours earlier, while short liquidations reached $6.2 million. Bitcoin’s market capitalization slipped from just over $1.32 trillion on Wednesday to $1.3 trillion.
Oil surge and stalled legislation drive the reversal
Progress on the CLARITY Act stalled amid renewed friction between Senate Republicans and Democrats, and macro forces moved to the fore. Brent crude briefly pierced $101 per barrel while U.S. West Texas Intermediate leapt past $92.
The oil spike traced back to Middle East tension. Energy traders reacted to statements from President Donald Trump signaling potential military escalation against Iranian targets, while Houthi attacks on Red Sea shipping added a risk premium to crude and rekindled fears of sticky inflation. Bitunix analyst Dean Chen named liquidity, energy volatility, and Federal Reserve policy expectations as the triad that could steer risk assets in the weeks ahead.
Capital chases AI over crypto
A separate drag comes from where investors are putting money. Trader Wise Crypto tied the stall to a rotation into AI rather than crypto, writing bluntly: “Capital is flowing to AI, not crypto”. He noted that spot Bitcoin ETFs drew just under $1 billion over seven straight days of inflows, a modest sum against the $6.9 billion that left those funds in May and June.
Big Tech is spending between $190 billion and $205 billion on AI infrastructure this year, and AI-linked stocks have climbed roughly 69% since January while Bitcoin has fallen about 25% over the same stretch. Two-year Treasury yields near 4.3% and ten-year yields near 4.6% keep the dollar strong and investors wary of non-yielding assets.
Bitcoin now sits roughly 45% below its October all-time high near $126,000, still short of the softer inflation and falling yields analysts say it needs to break higher.
Sources: Bitcoin News, CryptoPotato
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