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<p>Last week, Bitcoin (<a href="https://coinmarketcap.com/currencies/bitcoin/" rel="noopener noreferrer nofollow">BTC</a>) and Ether (<a href="https://coinmarketcap.com/currencies/ethereum/" rel="noopener noreferrer nofollow">ETH</a>) fell to <a href="https://coinmarketcap.com/academy/article/bitcoin-price-prediction-2026-50k-btc" rel="noopener noreferrer nofollow">new 2026 lows</a> as an AI-driven cool-off in global megacap tech stocks shook markets. SpaceX (SPCX) briefly dipped below its IPO price, while AI chip manufacturers like Nvidia, AMD, Intel, Micron and SanDisk also saw sharp declines.</p><p>The view among analysts is that the primary reason for the selloff is broader <a href="https://coinmarketcap.com/top-stories/6a3c0a377513ab76c9d69dec/" rel="noopener noreferrer nofollow">tech-sector profit-taking</a>, partly driven by investors’ concerns over the AI industry’s high capital expenditures and speculative future revenues. As investor sentiment soured, it spilled over into crypto markets.</p><p>The read on crypto markets remains tilted toward the bears, with data showing the prices of crypto majors falling as aggregate open interest declined. The deleveraging indicates long traders being shaken out. It follows mounting investor concerns over <a href="https://coinmarketcap.com/academy/article/strategy-strc-drops-bitcoin-buys-spook-investors" rel="noopener noreferrer nofollow">Strategy’s STRC de-peg</a>. The company has unrealized losses of nearly $16 billion on its 847,363 Bitcoin treasury position, which has an average cost of $75,651 per BTC.</p><h2 id="the-rundown">The Rundown</h2><ul><li>Inflationary Worries Override Middle East Peace Optimism: Warsh Signals Higher-for-Longer Rates</li><li>ETF Flows Remain Negative: Is Institutional Selling Nearing Exhaustion?</li><li>Will Unwinding AI Trade Trigger Capital Rotation Between Crypto and Big Tech?</li><li>What’s On The Radar?</li></ul><h2 id="inflation-report-trumps-peace-in-the-middle-east-warsh-signals-higher-for-longer">Inflation Report Trumps Peace In The Middle East: Warsh Signals Higher-for-Longer</h2><p>The positive market response to a memorandum of understanding between the US and Iran, the reopening of the Strait of Hormuz, and oil prices falling below $70 was overshadowed by hotter-than-expected May PCE inflation data. According to the print, the headline PCE rose to 4.1% year-over-year, up from 3.8% in April.</p><p>The bulk of the inflation advance is attributed to energy price pass-through resulting from the war in Iran. However, PCE is the Fed’s preferred inflation gauge, and its hottest print in two years may raise the odds of a rate hike in July.</p><p>This may come as a disappointment for crypto traders who assumed Warsh would operate on President Trump’s view that interest rates should be lower. The reality of rising inflation has eroded risk appetite and chipped away at the thesis that rate cuts will supercharge crypto prices.</p><p>CME FedWatch currently projects a 70.1% probability of a hold at the July 29 FOMC meeting. Following the PCE print, the US dollar index rose to 101.38, a 13-month high. Generally, a strong DXY correlates with near-term BTC price weakness and vice versa.</p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/867f7c0aa3fe4645bda0207376ca0a5f.png"><p><em>Target rate probabilities for July 29 FOMC. Source: <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html" rel="noopener noreferrer nofollow">CME Group</a></em></p><h2 id="etf-flows-remain-negative-is-institutional-selling-nearing-exhaustion">ETF Flows Remain Negative: Is Institutional Selling Nearing Exhaustion?</h2><p>Spot Bitcoin ETF flows have remained negative through June, with month-to-date outflows exceeding $2.5 billion. Analysts have stuck with the view that traders are choosing to ride the fastest horse, i.e., the AI and IPO trade, rather than buying undervalued BTC and ETH.</p><p>Combined ETF outflows from May and June are set to exceed $7 billion. While Strategy remains a steady Bitcoin buyer, the negative overhang of its preferred shares, Stretch (STRC),&nbsp; falling below par has raised solvency concerns.</p><p>Traders still fear that at some point, Strategy will be forced to sell more Bitcoin, adding pressure to the current downtrend. This fear is expressed clearly in the crypto futures market, where Bitcoin’s aggregate open interest (OI) has moved in the $18.94 billion to $20.41 billion range over the past 8 days.</p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/b8e9f39de35d45018ac27e0638948373.png"><p><em>Bitcoin price, aggregate open interest, funding rate. Source: Hyblock</em></p><p>The largest move of the week was a sharp drop in OI to $18.94 billion on June 23. A positive takeaway in the interim is that, with OI flat and BTC price attempting to hold $60,000, the market may be entering a consolidation period. Ideally, OI rising alongside price would be a sign of fresh capital entering the market.</p><h2 id="will-unwinding-ai-trade-trigger-capital-rotation-between-crypto-and-big-tech">Will Unwinding AI Trade Trigger Capital Rotation Between Crypto and Big Tech?</h2><p>Although crypto majors swept new year-to-date lows last week, the dominant story was the AI and tech sell-off in equities. Crypto markets exhibited their historical correlation with tech stock performance, raising concerns that an extended downside in equities will add pressure to an already weak crypto market.</p><h2 id="what-s-on-the-radar">What’s On The Radar?</h2><ul><li><strong>Do spot Bitcoin ETF outflows slow down or reverse course?</strong> One of the first signs of a shift in sentiment would be a pause or reversal in ETF outflows and the resulting impact on BTC’s market price.</li><li><strong>Does the 60-day US-Iran MOU hold up, or will a breach send oil back above $80?</strong> Oil has retraced sharply from $100 to under $70 after the US and Iran signed a peace deal. However, occasional tit-for-tat military operations continue.</li><li><strong>Will the May PCE print push Warsh toward a July rate hike?</strong> Prediction markets show a 23% probability of a July hike, and the May PCE printed a two-year high. Any hawkish commentary from Fed officials could reprice the rate path and add pressure on risky assets.</li><li><strong>What will Strategy do?</strong> All eyes are on Strategy. Will they buy a significant amount of BTC at its current price? Will it address the STRC de-peg situation and the fact that it sits on $16 billion in unrealized losses?</li></ul>

Bitcoin, Ethereum Price Hit New 2026 Lows as Big Tech, AI Sell-Off

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