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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
Amid intensifying competition for liquidity between digital assets and traditional equities, the crypto market experienced a significant downturn as portfolios undergo strategic reallocation. Bitcoin price crashed to $66,000 on Wednesday, a sharp decline from its May high of $82,000. According to reports, the total cryptocurrency market capitalization fell by 4.2% to $2.3 trillion, primarily driven by investors rotating capital into the stock market to capitalize on the ongoing artificial intelligence boom.
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Sign InThis slump coincides with record-breaking gains in AI-related tech stocks, with Nvidia shares rising over 150% year-to-date per market data. Compared to the previous quarter, analyst research indicates that risk appetite is shifting toward companies providing tangible returns from the computing revolution, placing selling pressure on digital assets. Experts at JPMorgan recently noted that outflows from spot Bitcoin ETFs reflect this structural shift in institutional strategies as capital seeks exposure to semiconductor and software growth.
Traders should watch the $65,000 support level for Bitcoin, as a breach could trigger further liquidations. Looking ahead, the market awaits the U.S. Core PCE Price Index release on May 28, a critical gauge for Fed interest rate path. An actual reading above the 0.3% forecast could strengthen the dollar, potentially compounding pressure on crypto assets in the near term as borrowing costs remain elevated.