Bitcoin (BTC) price declined by 4.1% in the early hours of Sept. 30, retesting the $63,500 support level and erasing the gains from the previous five days. The recent attempt to surpass $66,000 lasted less than three days, but the correction only resulted in under $40 million in leveraged long futures being liquidated. This data suggests that bulls were not caught off guard, though the factors driving the downturn remain present.
US economic outlook is uncertain, adding pressure on BTC price
Stock market futures in the United States slipped 0.20% as investors awaited US Federal Reserve Chair Jerome Powell’s comments on the economic outlook. Concerns are rising about the activity in the services and manufacturing sectors and the upcoming September jobs report on Oct. 4. Bank of America US economist Aditya Bhave wrote in a note to clients on Sept. 27 that “The labor market is the biggest risk to our outlook,” according to Yahoo Finance.
Given Bitcoin’s high short-term correlation with the stock market, traders believe that a slowdown in the S&P 500 could negatively affect BTC price. Some analysts argue that a potential bubble in the artificial intelligence (AI) sector could trigger market panic, leading investors to shift toward safe-haven assets such as short-term government bonds and cash.
Number of funding rounds on AI companies. Source: Aventis Advisors
Mike Fishbein, author of the “AI Marketing Brief” newsletter, contends that the technology itself isn’t the primary driver behind a potential AI market crash. In his view, the problem lies in how most users are engaging with these services, which currently rely on providers like ChatGPT (OpenAI), Gemini (Google), Copilot (Microsoft), and Grok (X).
Source: Mike Fishbein
Fishbein points out that the cost of utilizing large language models (LLMs) has “plummeted,” while companies continue to charge “bloated” subscription fees. He predicts that customers will eventually “wise up,” leading to lower pricing for these services and reducing revenue potential, making it harder to afford increasingly expensive AI hardware.
Weakening European economies and…
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