Crypto Faces Pressure as AI Fears Contribute to Market Weakness
By John Nada·Feb 24, 2026·5 min read
Cryptocurrency markets face pressure with major losses as macroeconomic fears related to AI disruptions drain risk appetite. Bitcoin's struggle within its range signals potential bearish momentum.
Cryptocurrency markets are grappling with significant losses, with major assets like Bitcoin, Ethereum, XRP, and Solana posting declines of 8-11% this week. Bitcoin, currently trading around $62,900, has failed to break its current range, raising concerns about a bearish outlook. The market is caught in a $60,000 to $70,000 holding pattern, reflecting a lack of clear direction and diminishing risk appetite among investors.
This recent downturn has been characterized by a series of price movements that have extended a grinding move lower. Bitcoin slid to around $62,900 on Tuesday, down 2.1% on the day and 7.5% on the week. The ongoing struggle to break above the established range has led analysts to warn that the technical outlook is increasingly tilting toward bearish sentiment. The price action has pinned the market inside the $60,000-to-$70,000 band that formed after a significant flush on February 5. This range is beginning to feel less like a stable base and more like a holding pattern, awaiting a catalyst for a decisive move.
Altcoins are experiencing even steeper declines, with Ethereum around $1,829, down 8% for the week. XRP fell 10.8%, Solana's SOL shed 11.3%, and dogecoin dropped nearly 10%. The underperformance across these major cryptocurrencies reflects a broader market environment where risk appetite is shrinking. Cryptocurrency data analytics firm CryptoQuant flagged sell-side pressure among altcoins at five-year highs, suggesting that holders are actively distributing their assets into a market characterized by a scarcity of buyers outside of the largest market caps. Such structural selling trends lead to gradual price declines, making it challenging for momentum traders to capitalize on short-term fluctuations.
Adding to the market's woes is a macroeconomic shift driven by fears of an emerging 'AI scare trade.' A report from Citrini Research has highlighted potential economic disruptions stemming from artificial intelligence, prompting investors to reassess their positions in tech-adjacent equities. The report warns of widespread economic disruptions across the delivery, payments, and software sectors due to AI advancements, which have led investors to sell off positions in companies that could face displacement risks.
The impact of these macro jitters on cryptocurrency is significant. While digital assets do not always sell off in lockstep with equities, they are sensitive to shifts in liquidity and market positioning that drive risk-off moves. As risk capital drains from various sectors, the crypto market, which is particularly vulnerable to liquidity shifts, is feeling the pressure. Bitcoin is now 48% below its all-time high from October and sitting 5.5% below its 2021 peak of $69,000. This continued decline raises concerns that if Bitcoin does not reclaim higher ground soon, the technical picture will increasingly favor bearish positions.
The $60,000 to $70,000 range holds historical significance, having acted as the ceiling for the entire 2021 cycle. This zone is now a battlefield between long-term accumulators and newer holders who are cutting their losses. Traders are closely monitoring this range, as a break below the mid-$65,000 area would confirm further downside momentum. Conversely, a rally above $70,000 could invalidate the current bearish pattern. However, the combination of waning risk appetite and external economic fears creates a challenging landscape for crypto assets, emphasizing the need for investors to remain vigilant as market dynamics evolve.
Market analysts, such as FxPro chief market analyst Alex Kuptsikevich, have noted that Bitcoin's recent attempts at recovery are shaping up more as consolidation rather than a reversal. He pointed out a bearish pennant forming on the daily chart, which signals that a decisive move in either direction is imminent. The technical indicators suggest that the longer Bitcoin remains within the established range, the more likely it is to continue its downward trajectory.
The relationship between the cryptocurrency market and broader economic trends is increasingly evident. The fears surrounding AI are not only affecting tech stocks but also influencing investor sentiment in the crypto market. As investors reassess their risk exposure, the liquidity that typically supports cryptocurrency prices is drying up. This has been reflected in the significant price declines across altcoins, where many investors appear to be prioritizing cash preservation over speculative investments in digital assets.
Moreover, the notion of an 'AI scare trade' is a growing concern among market participants. This term encapsulates the fear that rapid advancements in AI technologies may lead to job losses and economic disruptions that could affect consumer spending and overall market confidence. As sectors that are heavily reliant on technology brace for potential upheaval, the implications for the cryptocurrency market could be profound. Investors are wary of positions that could be vulnerable to these shifts, causing a ripple effect that contributes to the ongoing declines in crypto prices.
In this volatile environment, market participants are advised to adopt a cautious approach. The structural sell-side pressure, combined with the bearish technical outlook, underscores the importance of being aware of market trends and external economic factors. As Bitcoin and other cryptocurrencies navigate this challenging landscape, the need for strategic investment decisions becomes paramount.
The sentiment within the crypto market reflects broader economic uncertainties, where risk aversion is becoming more pronounced. As Bitcoin and altcoins alike struggle under the weight of external pressures, traders are left weighing their options carefully, ready to respond to any shifts in market dynamics that could signal a change in the current trajectory.