Bitcoin has revived the possibility of retesting the $60,000 level after it failed to regain $67,200 and then fell 7 percent.

Cointelegraph, a blockchain media outlet, said on June 18 that $330 million in leveraged positions betting on gains were liquidated during the drop.

The correction is increasing market caution because it moved in the opposite direction to strong tech stocks. The Nasdaq 100 index traded about 1 percent below its record high, but bitcoin widened its losses over the same period. The market pointed to bitcoin weakness coinciding with funds moving into the artificial intelligence sector.

The macro environment also did not work in bitcoin's favour. After a memorandum of understanding was signed by U.S. President Donald Trump and Iranian President Masoud Pezeshkian, oil prices fell to $74 a barrel, the lowest level in 15 weeks. The oil decline was taken as a signal of easing inflation pressure, and U.S. continuing jobless claims were little changed at 1.81 million. It brought relief across risk assets, but did not lead to inflows into bitcoin.

Interpretations of the Federal Reserve's policy stance were also cited as a burden. CNBC said Fed Chair Kevin Warsh repeatedly mentioned "price stability" at a June 17 meeting, and the market took it as the Fed under the new chair seeking to take a stricter view of the inflation trend. The U.S. 5-year Treasury yield holding around 4.21 percent also created an unfavourable environment for non-interest-bearing assets.

A stronger dollar also weighed on assets such as bitcoin and gold. The dollar strengthened against a basket of major currencies, and gold prices fell 3.3 percent. With a growing view that the appeal of fixed-income products could last longer, demand for bitcoin also weakened.

In the derivatives market, bullish sentiment cooled noticeably. The annualised funding rate for bitcoin perpetual futures showed leveraged demand for gains slowing since June 4. Market participants have not regained confidence after bitcoin plunged in three days from $73,700 to as low as $61,300.

In contrast, appetite for AI-related assets strengthened in the stock market. SpaceX's market value jumped to $2.4 trillion within days after listing, and Intel shares rose 10 percent on June 17 after Trump said Apple had agreed to cooperate with Intel on processor production. Micron and SK Hynix have also recently joined the group of companies with market values above $1 trillion.

Some also said market sentiment is worse than during the 2022 FTX collapse. Joe Carlasare, a bitcoin supporter and a commercial litigation lawyer, said traders' sentiment has deteriorated compared with that time. He argued that in November 2022 almost all asset classes wobbled together due to the macro environment, but now the narrative that made people buy bitcoin has broken down.

It is also noted that bitcoin's degree of entry into the institutional mainstream has increased compared with the previous halving cycle. U.S.-listed spot bitcoin exchange-traded funds have amassed more than $102 billion in assets, and major financial institutions such as Morgan Stanley, Bank of America and Goldman Sachs have also launched bitcoin investment products for customers.

As a result, it is hard to rule out that bitcoin could retest $60,000 in the short term while the AI sector remains at the centre of the market. After that, the key variable remains how much institutional money flows into bitcoin.

I genuinely think bitcoin sentiment is worse now than it was during the FTX collapse. Back then, nearly every asset was struggling, and the cause was obvious: inflation / rising rates / brutal macro backdrop. This feels different, like a growing belief that the narratives that…