What happened?
Recently, speculation about an AI bubble has increased, with market concerns that technology stocks and AI-related assets are overvalued and could trigger a chain reaction of corrections. As a cryptocurrency, Bitcoin (BTC) is significantly affected by capital flows in the AI sector, and some people believe that a burst AI bubble would increase downward pressure on BTC.
Reactions from all parties
Mainstream organizations like Dalio and Carson Block of Muddy Waters believe that the AI bubble is unlikely to burst in the short term, as capital continues to flow in. Although market sentiment is panicking, it has not completely shifted to pessimism. Discussions within the BTC community are divided, with some traders waiting for the buying side to capitulate, while others argue that the current decline has been excessive and a recovery is possible.
Cash flow
The long-short ratio tends to lean towards the long side, while there are no significant spot open volume withdrawals, indicating that short-term funds are primarily standing outside the market.
Trading guide
After a short-term continuous decline, some KOLs believe that BTC has approached an oversold local area, increasing the likelihood of a recovery. Buying in tranches at low prices is appropriate. Long-term investors may consider increasing their purchases. Risk management should focus on the next selling pressure from large investors and miners. The well-known trader Pentoshi believes that after BTC prices fell sharply in the short term, it is advisable to consider buying in tranches in the current area to bet on a recovery. If prices continue to decline, position control is necessary. DeFi researcher @DefiSquared believes that BTC aligns with a long-term dollar-cost average of around 86,000, but is still affected by risk assets in the short term. He is optimistic about its digital gold properties in the long term and suggests differentiating investment cycles. Trader RunnerXBT reported that BTC continued to decline throughout the day. If miners and institutions are forced to sell, prices may form a temporary bottom. It is recommended to pay attention to related developments.
