What started as renewed anxiety around AI-driven capital spending among US mega-cap technology firms has quickly escalated into a global risk-off trigger, pulling crypto markets into the crossfire.
In the heated, still-unfolding Q4 earnings season, a single headline has dominated US tech giants' results: massive AI-related capital expenditures.
After Alphabet earlier this week, Microsoft’s earnings - released after Wednesday’s close - reinforced investor concerns about excessive AI investments, a scenario that has become all too familiar in the current market environment.
The company reiterated its commitment to aggressively expanding AI infrastructure, even as Azure cloud growth slowed, pushing capital spending to record highs.
Markets reacted decisively. The earnings impact spilled into the following trading session, sending Microsoft shares sharply lower and acting as a catalyst for a broader pullback across US equities. Commodities, which had just printed successive all-time highs, reversed abruptly, while capital rotated forcefully into cash, with the US Dollar Index (DXY) surging amid the sweeping risk repricing.
The global shockwave quickly hit the already struggling crypto market as it tried to regain its footing amid renewed macroeconomic tensions. Bitcoin broke down from its three-month consolidation range, briefly testing the $81,000 area. The move triggered a liquidation cascade, erasing roughly $800mn from market participants who had built long exposure over recent weeks.
Realized losses spike as late entrants capitulate
Spot Bitcoin ETFs recorded their largest daily net outflow since the November drawdown, totaling $817.8mn. These flows largely reflect realized losses, concentrated among investors who entered near recent cycle highs a few months ago.
Onchain data corroborates the view. Short-term holders – less than 155 days -realized losses surged to stress levels, approaching the magnitude observed during November’s capitulatory phase. In contrast, realized profits barely budged, underscoring the absence of broad-based distribution.
This asymmetry is critical. Meanwhile, long-term holders appear largely indifferent to the move, maintaining conviction and positioning within the recent trading range. Some segments of the long-tail holder base even added to their exposure, reinforcing the view that selling pressure is not coming from structurally committed capital.
Chart
(Source: Research Bitcoin Lab)
The bulk of the price dislocation occurred around the US market open yesterday, before extending into the Asian session overnight, when Bitcoin briefly plunged toward the $80,000 level, a key support zone for the continuation of the uptrend. The timing reinforces the interpretation of the move as macro-driven and exogenous, rather than the result of a deterioration in crypto-native fundamentals.
HODL cohorts confirm weak hands exiting
A deeper look at Bitcoin HODL Waves - which segment circulating supply based on how long coins have remained held - makes clear where the selling pressure is coming from.
Since the mid-January breakout, the bulk of market participants who significantly reduced their holdings are concentrated in the latest entrants. The latter are concentrated in the 30–90 days and 90–180 days cohorts, recording holding declines of -6.92% and -3.56% respectively.
(Source: CoinMetrics)
Longer-duration holders in the 4-5 year range also trimmed exposure, though to a far more limited extent, reducing their holdings by 1.33%, significantly offset by the increased Bitcoin holdings from the 5 years+ holders’ bucket over the same period.
What’s next?
The data points to a panic-driven reaction among short-term holders, who are historically the first to capitulate as price falls below their cost basis and macro volatility rises.
From a technical and positioning standpoint, $85,000 now stands as a critical reclaim level, marking a high-confluence zone between ETF holders’ cost basis and key onchain participant clusters.
Failure to hold above $80,000 would materially weaken the prevailing uptrend, with $75,000 emerging as the next major area to monitor. That's a level the market could reach in the blink of an eye if downside momentum breaches the $80,000 floor.
