Rising Treasury yields and a stronger US dollar continue to pressure Bitcoin as investors favor income generating assets over cryptocurrencies.
Bitcoin has struggled to establish momentum above the $65,000 level, and market analyst Wise Crypto believes the surge in artificial intelligence investment is one of the main reasons.
Although Bitcoin briefly climbed above $66,000 earlier this week, the rally quickly lost strength. According to Wise Crypto, capital is increasingly flowing into AI related companies instead of cryptocurrencies, while persistent inflation and elevated bond yields continue to weigh on risk assets.
Capital Continues to Favor AI
In a post on X, Wise Crypto pointed out that spot Bitcoin exchange traded funds have recorded seven consecutive days of net inflows totaling just under $1 billion. However, that figure remains modest compared with the $6.9 billion that exited the same funds during May and June.
At the same time, major technology companies are expected to spend between $190 billion and $205 billion on artificial intelligence infrastructure this year. Nvidia’s data center revenue has surged 92% compared with a year ago, while AI focused stocks have gained roughly 69% since January.
By comparison, Bitcoin has declined about 25% over the same period.
“Capital is flowing to AI, not crypto,” Wise Crypto wrote, adding that two year Treasury yields near 4.3% and ten year yields around 4.6% have strengthened the US dollar and reduced investor appetite for riskier assets.
At the time of writing, Bitcoin was trading near $65,400, down about 0.6% over the previous 24 hours after fluctuating between $65,300 and $66,300 during the day. Over the past week, BTC has traded within a range of approximately $62,500 to $66,900. Despite gaining nearly 5% over the past month, the cryptocurrency remains around 45% below its all time high of nearly $126,000 reached last October.
Wise Crypto believes Bitcoin will require lower inflation, declining bond yields, and stronger buying demand before it can decisively break out of the $60,000 to $70,000 trading range.
Another analyst, Ted Pillows, echoed that view in his latest market update, pointing to Brent crude trading near $94 per barrel following renewed US and Iran tensions, along with the ten year Treasury Inflation Protected Securities real yield reaching approximately 2.31%, its highest level since the pandemic. He argued that these factors continue to weigh on non yielding assets such as Bitcoin.
Rather than chasing another move toward $66,500, Ted Pillows said he would prefer to see the $64,000 support level hold before turning more optimistic.
Key Bitcoin Levels Remain in Focus
Analyst Michaël van de Poppe said Bitcoin has already entered its target buying zone and noted that remaining above the 21 day moving average keeps the door open for additional short term gains. He identified $68,000 as the next major resistance level, with a successful breakout potentially paving the way toward $73,000.
Meanwhile, Axel Adler highlighted that spot Bitcoin ETFs have attracted $439 million in inflows so far this week. He also observed that the Coinbase discount, which has persisted for 78 days, is beginning to narrow.
Looking further ahead, EGRAG CRYPTO identified a developing double bottom pattern that would require a weekly close above $83,000 to confirm. If validated, the formation projects a long term target of $173,000. However, the setup would be invalidated if Bitcoin closes a week below roughly $51,000.
Bitfinex analysts also identified a key resistance zone between $67,900 and $68,300. They noted that many short term holders purchased Bitcoin within that range and may choose to sell once they break even, a pattern that has repeatedly limited upward momentum and could once again cap any rally back toward $68,000.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
