Bitcoin fell below $60,000 and slid to near its 200-week moving average, a long-term trend gauge. Some in the market are looking for a dip-buying opportunity, but Wintermute said it is still too early to conclude a bottom is in.

CoinPost reported on Tuesday that crypto market maker Wintermute said in a recent weekly report that the latest bitcoin drop is more closely tied to a correction in large-cap tech stocks, especially AI and semiconductor shares, than to broader risk-asset aversion.

Bitcoin fell as low as $59,300 intraday and was trading around $58,000 at the time of writing.

Ethereum fell more. Wintermute said ethereum slid 7.9 percent to about $1,580.

Stock market volatility also increased. The Nasdaq fell for 5 straight sessions, including a 4.5 percent drop in a single day. The semiconductor exchange-traded fund SMH fell 7 percent in one day, while South Korea's KOSPI, which has a high semiconductor weighting, was hit hard enough to trigger an intraday circuit breaker.

By contrast, the small-cap focused Russell 2000 index rose 1.4 percent, and prices of long-term U.S. Treasuries also climbed. Wintermute interpreted this not as a broad move to avoid risk assets, but as a rotation of funds from large-cap tech stocks into other assets.

The macroeconomic backdrop also weighed. The U.S. May personal consumption expenditures price index rose 4.1 percent year on year, the highest level since 2023. The market again raised the possibility of a U.S. policy rate hike in September, and the dollar index (DXY) rose to around 101, its highest level in about a year. A strong dollar is cited as a factor that weighs on risk assets broadly, including cryptocurrencies.

Brent crude from the North Sea, however, fell 8.1 percent over the past week, nearing levels from before geopolitical tensions in the Middle East intensified. Wintermute said inflation pressures could ease somewhat if energy prices stabilise.

Market sentiment also makes it difficult to be confident a bottom is in. The Fear and Greed Index remained in the "extreme fear" zone at 18 to 24, and the share of bitcoin supply sitting at an unrealised loss rose to about 50 percent of the total.

Wintermute said in past cycles such levels often appeared 2 to 3 quarters before a final bottom formed. It did not rule out further declines, noting that in previous bear markets the share of loss-making supply rose to around 60 percent.

Institutional flows have not improved either. U.S. spot bitcoin ETFs saw net outflows of about $1.8 billion over the past week. Wintermute said this was among the largest outflows since the ETFs launched.

The report said cryptocurrencies are no longer the most volatile risk asset and that AI-related stocks have recently taken on part of that role. That implies investment funds could flow into AI-related shares before cryptocurrencies even if the macro environment improves.

The market is also watching Strategy. Strategy, the company with the largest bitcoin holdings, recently raised the dividend rate on its preferred shares STRC to 12 percent and announced a new capital management policy that allows conditional bitcoin sales for the first time since its founding. Wintermute interpreted this as a response to a situation in which Strategy shares are valued below the value of the bitcoin it holds.

Near-term focus is narrowing further in these conditions. Wintermute pointed to U.S. employment data due this week and whether bitcoin can hold its 200-week moving average and the area around $58,000 as key variables. The decline has already been large, but the market has yet to receive a signal that a bottom has been confirmed.