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Anndy Lian
Tech earnings fail AI test and crypto pays the price
Asian equity markets began the session on a sombre note, weighed down by a broad-based retreat in technology stocks, a sector that has powered regional gains throughout much of the year. The sell-off reflects growing investor unease over the sustainability of artificial intelligence-driven valuations, especially as major US tech firms like Oracle and Broadcom delivered earnings outlooks that failed to meet elevated expectations.
The ripple effects from Wall Street’s Nasdaq, which dropped 1.81 per cent, have now reached Tokyo, Hong Kong, and Seoul, reinforcing the increasingly tight correlation between global tech sentiment and risk-on assets like cryptocurrencies.
Japan’s Nikkei 225 opened at 49,004.9 points, marking a decline of over one per cent from its prior close of 49,512.28. The losses were led by heavyweight tech and semiconductor-related names, with SoftBank Group plunging 7.25 per cent on concerns that its aggressive AI and venture bets may not deliver near-term returns.
In Hong Kong, the Hang Seng Index hovered around 25,405.63 points, slightly lower for the day, but the real pain came from its technology sub-index, which slid sharply as mainland and overseas investors rotated out of growth-oriented equities. Meanwhile, mainland China’s Shanghai Composite bucked the trend slightly, trading at 3,874.3586 points with a modest gain, though it too experienced earlier-week volatility as Beijing’s mixed signals on fiscal stimulus and tech regulation created uncertainty.
At the heart of this market-wide caution lies a fundamental reassessment of AI-driven capital allocation. For over two years, tech companies across Asia, from South Korea’s Samsung and SK Hynix to Taiwan’s TSMC, have poured billions into AI infrastructure, data centres, and next-generation chip development. These investments lifted stock prices to record highs, supported by narratives of an AI revolution that would reshape global productivity.
Today’s market action suggests investors are demanding more than vision; they want measurable returns. With forward earnings revisions turning negative for several key players, the market is pricing in a potential gap between ambition and profitability.
This shift in sentiment has spilled directly into the cryptocurrency market, which fell 1.64 per cent in the last 24 hours, extending a 7.17 per cent weekly decline. The linkage is no longer coincidental; it is structural. Over the past 18 months, institutional capital has increasingly treated large-cap crypto assets, particularly Bitcoin, as a satellite to the Nasdaq, especially during macro regimes dominated by liquidity expectations and risk appetite.
The 24-hour correlation between Bitcoin and the Nasdaq-100 now stands at plus 0.89, meaning the two move in near lockstep. When US tech falters, crypto follows, and today’s Nasdaq weakness is fuelled by AI scepticism, which is transmitted directly into digital asset markets.
Compounding the pressure was a significant liquidation cascade in crypto derivatives markets. In just 24 hours, Bitcoin saw US$153 million in liquidations, a 148 per cent increase from the prior day, with short positions accounting for US$79.5 million of that total. Such aggressive unwinding of leveraged positions typically occurs when prices breach key technical levels, triggering stop-losses and margin calls in a self-reinforcing spiral.
With total open interest across crypto derivatives at US$776 billion, the ecosystem remains highly sensitive to volatility shocks. The 7-day Relative Strength Index for Bitcoin has plunged to 15.4, signalling extreme oversold conditions, a level that historically precedes short-term bounces. Without a catalyst, oversold does not automatically mean reversal.
Further undermining confidence is the curious paradox surrounding XRP. Despite the recent launch of an XRP exchange-traded fund that has drawn US$1 billion in inflows since November, the token itself trades 47 per cent below its all-time high. This disconnect between institutional adoption and price performance has sown doubt among retail traders and algorithmic strategies alike.
If a regulated ETF with billion-dollar backing cannot reignite momentum in a top-five asset, the broader altcoin market may lack the firepower for a meaningful recovery. As a result, Bitcoin dominance has climbed to 59.2 per cent, reflecting a flight to relative safety within an already volatile asset class.
Crypto’s traditional role as a hedge has also diminished. Its 24-hour correlation with gold has turned negative at minus 0.35, indicating that in the current environment, it behaves not as a store of value but as a high-beta tech proxy. This shift matters because it means that during macro stress, such as uncertainty around central bank policy, crypto no longer offers diversification benefits. Instead, it amplifies risk. Traders now view it through the same lens as semiconductor stocks or cloud software equities, a leveraged bet on future innovation with limited near-term cash flows.
Looking ahead, all eyes in Asia will turn to the Bank of Japan’s policy decision later today. While Japan has maintained ultra-loose monetary policy longer than any other major economy, recent inflation data and yen weakness have sparked speculation that a rate hike, however modest, could be on the table. Such a move would tighten financial conditions in the region, further pressuring high-duration assets like tech stocks and crypto. Even the mere acknowledgement of a policy shift could trigger another leg down in risk markets.
In this context, the path for Bitcoin and Asian tech hinges less on fundamentals and more on macro liquidity. The market is no longer rewarding vision alone. It requires evidence that AI investments will translate into earnings, that crypto ETFs will drive sustainable demand, and that central banks will not abruptly withdraw the punchbowl. Until those questions are answered, volatility will persist, and the correlation between the Nasdaq and crypto will remain a dominant force shaping price action.
The current oversold RSI reading may hint at a tactical bounce, but without a shift in narrative or policy, any relief rally could prove fleeting. The era of unquestioning faith in AI-driven growth appears to be giving way to a more discerning, earnings-focused regime, one that will separate speculative narratives from enduring value.
 
Source: https://e27.co/tech-earnings-fail-ai-test-and-crypto-pays-the-price-20251218/
 
The post Tech earnings fail AI test and crypto pays the price appeared first on Anndy Lian by Anndy Lian.
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Bitcoin is no longer trading at a level defined by hype, momentum, or narrative-driven optimism. Instead, it is hovering near what analysts increasingly describe as the “price of belief” — a zone that reflects not just technical structure, but collective conviction.
At the center of this debate sits $81,500, a level identified by CryptoQuant as Bitcoin’s True Market Mean Price (TMMP). This metric represents the average on-chain acquisition cost of non-mining investors — in other words, the price at which most real capital entered the market.
As Bitcoin oscillates around this level, the market is being forced into a quiet but decisive test:
Will holders defend their cost basis, or will belief fracture under prolonged uncertainty?
Bitcoin Trades at the “Price of Belief” as Conviction Is Put to the Test
On-chain data now reflects mid-cycle stress, while technical resistance continues to cap upside attempts. Analysts are increasingly divided, and the market is locked in a fragile standoff between two opposing forces:
Long-term holders defending their average entry price, and
Sellers increasingly willing to exit at breakeven, rather than endure another drawdown.
This tension makes TMMP far more than a statistical reference. It functions as a psychological anchor, marking the threshold where conviction must either strengthen or give way.
When Bitcoin trades at TMMP, investors face a binary decision:
Hold through uncertainty and trust the long-term thesis, or
Sell into relief rallies and reclaim capital at cost.
Historically, this decision point has repeatedly defined Bitcoin’s next major move.
Why TMMP at $81,500 Is Structurally and Psychologically Critical
CryptoQuant analyst Moreno highlights $81,500 as the current TMMP — the level where the bulk of investor capital is concentrated.
History shows a consistent pattern:
Above TMMP: Investors tend to accumulate dips, reinforcing support
Below TMMP: The same zone often flips into resistance as holders sell into rallies to exit near breakeven
> “When BTC trades above it, investors are generally comfortable,” Moreno explained.
“When price loses it, that same level often becomes resistance, as people who bought near the average cost use rallies to exit.”
This dynamic is already visible. Bitcoin’s recent inability to decisively reclaim higher levels suggests that supply is emerging precisely where belief is being tested.
In prior cycles:
During 2020–2021, TMMP acted as a launchpad for trend continuation
In 2022, it became a ceiling, marking the erosion of confidence
Which role it plays now may determine Bitcoin’s trajectory for months, not days.
AVIV Ratio Signals a Quiet Erosion of Investor Profitability
Adding another behavioral layer is the AVIV Ratio, an on-chain metric that compares active market valuation to realized valuation, focusing specifically on investor profitability rather than momentum.
Unlike RSI or MACD, AVIV reflects how much profit remains embedded in the market.
Currently, AVIV is compressing toward the 0.8–0.9 range, a zone historically associated with mid-cycle transitions. These periods are characterized not by violent crashes, but by prolonged uncertainty, sideways price action, and psychological exhaustion.
According to CryptoQuant:
Holding above TMMP while AVIV stabilizes suggests investors are absorbing supply and defending cost basis
Losing TMMP while AVIV continues to compress signals fading profitability and weakening confidence
Such environments often force weaker hands out not through panic, but through time and stagnation. Unrealized gains quietly disappear, conviction erodes, and patience is tested.
This is often how redistribution happens before the next decisive move.
Technical Resistance and Macro Uncertainty Reinforce Market Paralysis
Price action offers little clarity. Bitcoin has repeatedly failed to reclaim its yearly open, reinforcing hesitation among technical traders and momentum-driven participants.
Each rejection strengthens the perception that upside remains capped, at least in the near term.
This technical stalemate mirrors a deeper ideological split within the market.
Veteran holders — many shaped by the 2021 peak and the subsequent 70% drawdown — appear increasingly sensitive to cycle models and technical signals. As analyst PlanB observed:
> “Why is Bitcoin not pumping? Because 50% is selling (OGs traumatized by 2021, technical investors watching RSI, four-year cycle believers expecting post-halving weakness) while the other 50% is buying (fundamental investors, TradFi, banks). Epic battle… until sellers are out of ammo.”
Institutional and traditional finance participants remain steady buyers, but their accumulation has so far only been enough to stabilize, not ignite a breakout.
High-Profile Exits Add Psychological Pressure
Macro uncertainty has further intensified debate. Analyst Luke Gromen recently revealed that he sold the majority of his Bitcoin position near $95,000, citing long-term technical breakdowns and systemic concerns.
Shared publicly via Swan Bitcoin’s No Second Best podcast, the disclosure amplified bearish sentiment at a sensitive moment.
Gromen pointed to:
Weakening long-term momentum
Bitcoin’s failure to outperform gold
Broader financial system fragility heading toward 2026
While Swan’s hosts challenged his conclusions, the impact of such a sale is psychological as much as analytical. High-profile exits tend to weigh heavily when price compresses and on-chain data already points to shrinking profit buffers.
Will Belief Hold the Line?
Bitcoin now stands at a crossroads defined less by narrative and more by resolve.
If price holds above $81,500 and AVIV stabilizes, it would signal that investors remain willing to defend their cost basis — a necessary condition for renewed trend continuation.
If TMMP fails and AVIV continues to compress, belief alone may no longer be enough. The market would then be forced to seek demand at lower levels.
This is not a moment of euphoria or panic. It is a moment of decision.
Bitcoin is trading at the price of belief — and the market must now decide whether conviction is strong enough to hold.
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