Bitcoin (BTC) has plunged to a new low of $72,945, marking a significant drop as bulls failed to maintain the $80,000 support level. Year-to-date, Bitcoin is down 15% and nearly 45% from its all-time high of $126,267, leading to growing concerns that its cyclical bull market may have reached its conclusion. According to Cointelegraph, the rocky price action in US stock markets is believed to be driving the selling across the crypto market. Investors are increasingly questioning the sustainability of high valuations tied to artificial intelligence infrastructure, as fears grow that product demand and revenues may not meet industry projections. This shift in sentiment is evident across major stocks, including the S&P 500, DOW, and NASDAQ, all of which are experiencing declines. AI giants NVIDIA and Microsoft saw respective losses of 3.4% and 2.7%, while Amazon is down 2.67%. A wave of earnings reports from over 100 S&P 500 companies is set to fuel this volatility, reflecting investor anxiety ahead of the data release.

Within the crypto sector, liquidations of leveraged positions are exerting additional pressure on Bitcoin’s price, with BTC longs facing $127.25 million in forced closures and ETH longs totaling $159.1 million in liquidations. Despite suggestions from analysts that Bitcoin is trading at a deep discount, attempts at dip-buying by retail and institutional investors have been largely ineffective in reversing the downward trend. Joe Burnett, Strive’s vice president of Bitcoin strategy, pointed out that BTC’s current price action is still within historical norms at $74,000, noting that the 45% drawdown aligns closely with historical volatility. He added that such volatility is symptomatic of a rapidly monetizing asset.

Looking ahead, if the selling continues, current Bitcoin orderbook data indicates bids are thickening between $71,800 and $63,000. Whether traders will step in to buy within that range remains uncertain. Factors outside of the crypto market, particularly macroeconomic influences and stock market developments, are likely to be the predominant drivers of Bitcoin’s price in the near term. This turbulence highlights the interconnectedness of crypto and traditional markets, with implications for both investors and the broader financial landscape. As Bitcoin navigates this challenging environment, its future remains closely tied to the unfolding trends within the global economy.