Bitcoin Slumps to Six-Month Low as AI Capex Jitters and Rate-Cut Doubts Trigger $900M in Crypto Liquidations

Bitcoin’s retreat accelerated late Monday, syncing with a broader risk-off move across equities as investors reassessed near-term liquidity. Per CoinGecko, BTC traded around $92,200, off 2.3% on the day and at its weakest since late April—down more than 14% in two weeks, effectively giving back its 2025 gains. Ethereum hovered near $3,000 after a $2,960 intraday print, its lowest in four months. Solana fell 4.4%, Dogecoin 3.7%, and XRP 2%. The Nasdaq and S&P 500 each slipped roughly 1%, while Coinbase declined more than 7%.

The real driver: a liquidity repricing centered on two levers—interest-rate expectations and AI spending. Investors are lowering the odds of a December rate cut, and at the same time digesting heavier artificial intelligence capex from mega-cap tech names like Google and Microsoft that could weigh on balance sheets near term. That combination typically compresses risk appetite across “high-duration” assets first. One strategist framed it as a convergence of macro headwinds pushing a broader risk-off rotation and spreading risk aversion from the AI complex into crypto.

Positioning magnified the move. Coinglass shows more than $900 million in crypto liquidations over 24 hours, including over $550 million in longs. Once BTC broke through key technical levels, leveraged longs unwound rapidly. Market participants noted some whales and miners sold into prior strength, and after supports cracked, derivative liquidations accelerated the slide. The view from several desks: this looks like short-term de-risking and position resets rather than a thesis break.

Sentiment reflects that caution. A Myriad predictions market indicates 60% of respondents see ETH drifting toward $2,500 versus $4,000—an about-face from last week’s skew and a sign of growing pessimism. Myriad is owned by Dastan. Layer on anxieties about prices, the U.S. trade war, missing figures from October jobs and inflation reports, and a slumping U.S. economy, and you get a fragile backdrop that doesn’t tolerate disappointments in rates or earnings.

Cycle context matters. Some managers point out Bitcoin is still roughly near its uptrend line from the rally that began in October 2024. They describe the current drawdown as within “normal course” for crypto and note it wouldn’t be unusual to see a sharp flush and a quick recovery. Their models suggest we’re roughly midway through the cycle and have yet to observe the extreme volumes and blow-off conditions that often mark cycle peaks—unlike 2017 and 2021.

My read: this is a liquidity story with an AI twist. As AI capex climbs, it can crowd out buybacks and pressure growth-stock multiples, dampening the wealth effect and marginal flows into crypto. When the probability of near-term cuts falls, dollar liquidity tightens further. In crypto’s microstructure, that macro squeeze expresses itself via elevated perp leverage, funding stress, and reflexive liquidations. Miner treasuries and larger holders likely lean into strength to manage operational costs and optionality, adding supply around fragile levels.

I’m watching three things to gauge whether this de-risking exhausts quickly: - Rate path into December and how rate-cut odds evolve in futures. - Big Tech capex commentary—any moderation would ease contagion into high-beta assets. - Derivatives cleanup—open interest resets, funding normalizing, and a rise in stablecoin net issuance would signal risk capacity returning.

None of this precludes a fast downside spike followed by a sharp snapback—crypto often behaves that way. But until liquidity expectations stabilize, rallies may face constrained follow-through.