Bitcoin breaks $65,000 as tech stocks retreat on AI fears
Bitcoin's move above $65,000 highlights a growing decoupling from traditional risk assets as AI valuations face a reckoning and macroeconomic pressures mount.
Bitcoin broke above $65,000 on Monday, even as the Nasdaq-100 dropped below 28,800 for the first time in five weeks. The cryptocurrency's relative strength underscores a notable decoupling from the broader technology sector, which suffered sharp declines in AI-related names.
Investors have been taking profits in memory-chip makers and other AI-exposed firms, including IBM, Oracle, and ARM, over excessive valuation concerns. This risk aversion coincided with US 5-year Treasury yields surging to 4.33%, up from 4.22% two weeks ago. Even gold, which typically benefits from uncertainty, has trended downward since mid-May.
Despite Bitcoin's spot price resilience, derivatives traders remain distinctly cautious. The perpetual futures annualized funding rate sits at a neutral 8%, flat over the past week and well below the 12% threshold that signals excessive bullish leverage. Furthermore, the 30-day options delta skew stands at 13%, meaning protective put options still trade at a premium to calls. While this is an improvement from the prior week's 19%, it shows whales and market makers are still actively hedging against downside risks.
This hedging behavior may reflect rising geopolitical tensions, particularly after US President Trump vowed retaliation against Iran following a deadly missile strike in Jordan. On the corporate side, Bitcoin's upside found support from Strategy. The firm raised $263 million through a common stock sale, boosting its cash reserves to $3.22 billion and alleviating market fears that it might be forced to sell its holdings to cover $1.76 billion in annual preferred dividends and $2.6 billion in upcoming convertible debt maturities.
The divergence between Bitcoin's spot strength and its derivatives positioning suggests the market is bracing for further traditional finance weakness. Traders are demanding higher returns on government bonds, a sign they anticipate expansionary monetary measures to address ongoing fiscal debt issues. If the current rotation out of AI stocks accelerates amid weak corporate earnings, Bitcoin could effectively act as a hedge, potentially pushing the token toward $70,000.
