The cryptocurrency winter is not over! The crypto market resumes its downward trend, following the sentiment of tech stocks

Cryptocurrency fell on Thursday. The day before, the crypto market unexpectedly rebounded, leading some investors to optimistically believe that after more than four months of decline, the cryptocurrency market might be bottoming out. Bitcoin dropped 3.5% during the New York trading session, reaching $66,511. On Wednesday, Bitcoin had risen towards $70,000 for the first time since February 16, driven by a rebound in risk assets overall. Bitcoin ETFs listed in the U.S. recorded over $500 million in net inflows on Wednesday, but there has still been a cumulative net outflow of about $1.7 billion this year. Cryptocurrencies continue to follow the market sentiment of tech stocks. Nvidia's stock price fell over 5% on Thursday due to market skepticism about the sustainability of large-scale AI spending, despite delivering strong earnings. Meanwhile, traders are pulling out of sectors that are seen as potentially impacted by AI. Adam McCarthy, a research analyst at crypto data company Kaiko, stated: "I am not very optimistic at the moment. Such rebounds are to be expected during bear markets and periods of low liquidity. As we have seen, this rally lacks sufficient support, so the pullback is not surprising." Matt Hougan, Chief Investment Officer of Bitwise Asset Management, remarked: "The end of the crypto winter does not conclude with excitement, but rather with indifference. A single-day surge is certainly exciting, but no one expects Bitcoin to directly return to $100,000. Bitcoin is in the process of bottoming out. This process will take some time and will be quite chaotic, and there may even be lower lows." Crypto bull Tom Lee believes that markets often bottom out amid "bad news," and the AI doomsday article from Citrini Research impacting the market suggests that a bottoming region is forming. He believes that the decline of the Magnificent 7 has "completed about 95%," and the sell-off in the software sector has "completed about 99%," with the cryptocurrency pullback also in its "final weeks." Earlier this month, Bitcoin erased all gains since former President Trump's re-election victory in November 2024. The market had high hopes for a more crypto-friendly policy during Trump's second term, which had previously pushed Bitcoin to a historic high of over $126,000 in October last year. However, a subsequent large-scale sell-off has kept digital assets under pressure since then. The mining company American Bitcoin Corp., supported by the Trump family, which had enjoyed a successful listing on Nasdaq during the crypto boom, is now deeply entrenched in the most severe downturn in the industry since 2022. The company reported a loss of $59 million in the fourth quarter, and its market value has evaporated by nearly 90%. An analysis article from Wall Street Insight points out that this time, the crypto winter has not seen a collapse of the underlying infrastructure. Despite Bitcoin facing sell-offs, the underlying infrastructure has not collapsed: exchanges are operating normally, custodians have good solvency, institutional buyers are holding their ground, Bitcoin ETF assets are being held steadily, and the supply available for free trading has decreased. Bernstein analysts believe that the current situation is merely a "crisis of confidence."