Analysis: Bitcoin falls below a key support level to a ten-day low as a selloff in the AI sector spreads to the crypto market

ME News, July 29 (UTC+8). Dragged down by a plunge in Asian chip stocks, the U.S. tech sector came under pressure. After the U.S. market opened on Tuesday, Bitcoin briefly fell below $63k, breaking a key support level and hitting a new low in nearly 10 days. Market data shows Bitcoin’s price action was influenced by global tech stock selloffs; a sharp drop in Asia’s semiconductor sector triggered a chain reaction in risk assets that then spread to the U.S. market.

This tech-stock adjustment was mainly driven by investors’ concerns about the return on AI infrastructure investment. The market has begun questioning the sustainability of ever-increasing capital expenditures by mega-scale cloud computing companies and whether massive AI spending can generate sufficient returns. Currently, the combined 2026 capital expenditure guidance for Alphabet, Microsoft, Amazon, and Meta Platforms is expected to total about $63k to $725B, and Wall Street expects this figure could rise further to $730B in 2027.

Among them, Alphabet saw negative free cash flow 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-investment model still raised market concerns.

In the crypto market, Bitcoin’s decline led to large-scale liquidation of long positions. Data shows that in the past 24 hours, the amount liquidated from crypto market longs exceeded $510 million. Analysts believe that if BTC breaks below $64.7k, the market could trigger a “cascade” of long liquidations; currently, a large amount of long liquidity has accumulated below this level, while the $65.8k to $66.2k zone above faces significant short-liquidation pressure.

At present, the market’s focus has shifted to AI mega-cap earnings reports and technology firms’ capital expenditure plans, as investors will use them to judge whether the AI investment boom still has sustainable support. (Source: PANews)