Bitcoin Tests $80,000 Support as Risk-Off Sentiment Spreads
TREE NEWS reports: Bitcoin briefly fell below the $80,000 mark on Monday, extending a roughly 4% decline from Thursday, as a wave of selling in Asian equity markets and caution ahead of the Federal Reserve’s policy decision weighed on risk assets. The world’s largest cryptocurrency by market capitalization touched an intraday low of $79,850 before recovering modestly. The move marked the first time Bitcoin has traded under $80,000 since early March.
The sell-off coincided with sharp declines in Seoul and Tokyo, where technology and semiconductor stocks bore the brunt of investor anxiety over the pace of artificial intelligence spending and its implications for corporate earnings. The Kospi index fell more than 2%, while Japan’s Nikkei 225 dropped 1.8%, with AI-related names leading the losses. The risk-off tone rippled through global markets, pressuring high-beta assets including cryptocurrencies.
Fed Decision Looms Under New Leadership
Traders are now squarely focused on Wednesday’s Federal Open Market Committee meeting, the first under Chair Kevin Warsh. Market participants are pricing in a near-certain hold on rates, but the accompanying statement and press conference will be scrutinized for signals on the future path of monetary policy. Warsh, known for his hawkish leanings, has previously advocated for tighter financial conditions and a more rules-based approach to policy.
“The market is in a wait-and-see mode,” said a digital asset strategist at a Singapore-based trading firm. “The combination of AI-related equity weakness and uncertainty about the Fed’s direction under new leadership is creating a perfect storm for short-term volatility. Bitcoin’s correlation with tech stocks has been rising, and that’s playing out in real time.”
Correlation with Tech Stocks Intensifies
Bitcoin’s relationship with the Nasdaq and other technology-heavy indices has strengthened in recent months, undermining its narrative as an uncorrelated hedge. The 30-day correlation coefficient between Bitcoin and the Nasdaq 100 has climbed to 0.65, near its highest level of the year. This growing linkage means that macro-driven equity moves are increasingly dictating crypto price action.
- Asian market contagion: Declines in Seoul and Tokyo quickly spread to European and U.S. futures, with crypto following suit.
- AI spending concerns: Investors are questioning whether the massive capital expenditures on AI infrastructure will translate into near-term profits, hitting chipmakers and cloud providers.
- Fed uncertainty: The transition to a new Fed chair adds an extra layer of unpredictability to the policy outlook.
What to Watch
Beyond the Fed decision, market participants will be monitoring upcoming earnings reports from major technology companies, particularly those with significant AI exposure. Any disappointment could further weigh on risk sentiment and drag Bitcoin lower. On the crypto-specific front, spot Bitcoin ETF flows have turned negative in recent sessions, reflecting broader risk aversion.
Technical analysts note that $78,000 represents a critical support level, corresponding to the 200-day moving average. A sustained break below could open the door to a deeper correction toward $72,000. Conversely, a hawkish-but-not-too-hawkish Fed outcome could spark a relief rally, with $85,000 serving as the first major resistance.
For now, the market remains hostage to macro forces, and Bitcoin’s ability to hold the $80,000 handle may depend more on Wednesday’s Fed commentary than on any crypto-native catalyst.
