Analysis: Bitcoin falls below a key support level, hitting a ten-day low; the sell-off in AI stocks spreads into the crypto market

PANews July 29 news: According to Cointelegraph, dragged down by a sharp slump in Asian chip stocks, the US technology sector came under pressure. On Tuesday, after the US stock market opened, Bitcoin briefly fell below $63k, breaking a key support level and hitting the lowest level in nearly 10 days. Market data shows that Bitcoin’s price action was influenced by global tech-stock selloffs. The crash in Asian semiconductor stocks triggered a chain reaction in risk assets, which then spread to the US market.

This tech-stock correction is mainly driven by investors’ concerns about the return on investment for AI infrastructure spending. The market has started to question whether mega-scale cloud computing companies can sustain their continued capital-expenditure increases and whether the massive AI investment can generate sufficient returns. At present, the four companies—Alphabet, Microsoft, Amazon, and Meta Platforms—are expected to have combined 2026 capital expenditure guidance of about $725 billion to $730 billion. Wall Street expects this figure could rise further to $900 billion in 2027.

Among them, Alphabet’s free cash flow turned negative for the first time in the second quarter; cash burn reached $5.9 billion. Although its cloud business grew by 82% due to increased demand for AI computing, its high-spending model still raised market concerns.

In the crypto market, Bitcoin’s drop caused large-scale liquidation of long positions. Data shows that in the past 24 hours, the total amount of long liquidations in the crypto market exceeded $510 million. Analysts believe that if BTC breaks below $64.7k, the market may trigger a “chain reaction” of long liquidations. Currently, a large amount of long liquidity has accumulated below that price, while the $65.8k to $66.2k zone above it faces significant short-liquidation pressure.

At present, the market’s focus has shifted to earnings reports from AI giants and technology companies’ capital expenditure plans. Investors will use this information to judge whether the AI investment boom still has sustained support.