Bitcoin and Ethereum continued to slide deeper into negative territory on Monday evening, reflecting growing unease across global markets. The plunge in two of the largest cryptocurrencies by market capitalization comes amid renewed investor anxiety over macroeconomic signals and concerns about the sustainability of tech sector spending on artificial intelligence (AI).
Bitcoin fell to approximately $92,200 — its lowest point since late April — marking a 2.3% drop in 24 hours. In just two weeks, the flagship digital asset has dropped more than 14%, effectively wiping out all gains made in 2025. Ethereum, the second-largest cryptocurrency, also slipped below the critical $3,000 threshold, its weakest level since mid-summer.
The decline underscores a broader shift in investor sentiment away from risk assets. As inflation fears resurface and interest rate expectations shift, capital is flowing out of volatile sectors like cryptocurrencies and into safer instruments such as government bonds and cash equivalents.
According to Juan Leon, a senior investment strategist at Bitwise Asset Management, the pullback is not isolated to crypto markets. “The current drawdown across digital assets reflects a broader risk-off rotation driven by a convergence of macro headwinds,” he explained. These headwinds include rising bond yields, uncertainty over the Federal Reserve’s monetary policy stance, and declining investor enthusiasm for tech stocks, particularly those heavily invested in AI development.
AI-related equities, once seen as the next growth frontier, have recently come under pressure. Despite ongoing innovation and large investments, investors are beginning to question the near-term profitability of AI ventures. That hesitation has spilled over into crypto markets, which often correlate with high-growth tech sectors due to overlapping investor bases.
The slowdown in digital assets is also being exacerbated by a lack of fresh catalysts. After a strong start to the year, the crypto space is experiencing a lull in positive momentum. Regulatory uncertainty in key markets like the United States continues to weigh heavily, with no clear path forward for comprehensive legislation.
Additionally, on-chain metrics show weakening fundamentals. Bitcoin’s trading volume and network activity have dipped, indicating subdued investor engagement. Ethereum, while still seeing steady adoption in decentralized finance (DeFi) and NFTs, has also seen a slowdown in new user growth and developer activity.
Stablecoins, often viewed as a barometer of market liquidity and sentiment, have remained largely flat, signaling cautious market behavior. USDT (Tether) and USDC (USD Coin) have held their pegs but show no significant increase in issuance, suggesting investors are sitting on the sidelines rather than deploying capital.
Meanwhile, altcoins have fared no better. Tokens such as Solana (SOL), Cardano (ADA), and Polkadot (DOT) have also seen double-digit declines over the past week. Even meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB), which often rally on social media hype, have struggled to find support amid the broader downturn.
Technical indicators point to a potential continuation of the bearish trend. Bitcoin is now trading below its 50-day and 100-day moving averages, a signal that often precedes further weakness. Ethereum is showing similar patterns, with resistance forming near the $3,100 level.
Despite the short-term pain, some analysts remain optimistic about the long-term trajectory. Institutional interest in crypto remains strong, with large asset managers and financial institutions continuing to explore blockchain-based investment products. The upcoming Bitcoin halving event in 2024 is also seen by many as a potential catalyst for renewed bullishness.
However, in the immediate term, the market appears to be in wait-and-see mode. Investors are closely monitoring upcoming economic data releases, including U.S. inflation numbers and job reports, for clues about the Federal Reserve’s next move. A more dovish tone from central banks could reignite interest in riskier assets, including cryptocurrencies.
In the meantime, market participants are advised to remain cautious. The heightened volatility, coupled with macroeconomic uncertainty, makes this a challenging environment for both traders and long-term holders. As always, risk management and a diversified investment strategy remain key.
Looking beyond price movements, the crypto industry continues to evolve. Ethereum developers are progressing on scaling solutions like sharding and Layer 2 integrations, aimed at reducing transaction costs and improving network efficiency. Bitcoin’s ecosystem is also seeing innovations, including the growth of the Lightning Network for faster and cheaper transactions.
Moreover, the rise of tokenized real-world assets (RWAs) is providing a new use case for blockchain technology, allowing traditional financial instruments like bonds and real estate to be traded on-chain. This trend may open the door to more institutional adoption and could help stabilize the crypto market in the long term.
In conclusion, the recent sell-off in cryptocurrencies reflects a confluence of factors — from macroeconomic jitters to shifting investor sentiment around AI and tech. While the near-term outlook remains uncertain, the underlying infrastructure of the digital asset ecosystem continues to mature, setting the stage for future resilience once market conditions improve.