Crypto Majors Lose Up to 10% as AI Stocks Stay in Demand
Bitcoin held up better than Dogecoin, Ether, and XRP, while outflows from U.S. spot Bitcoin ETFs and a strong dollar added pressure.
Key Takeaways
- The crypto market sold off sharply last week, with Dogecoin and HYPE among the biggest losers and Bitcoin down 5.3%.
- Investors rotated into AI-related stocks, while the equal-weighted S&P 500 reached a record high.
- Outflows from Bitcoin ETFs, high interest rates, and a strong dollar added more pressure on crypto and could keep volatility elevated.
Crypto took a hard hit last week, with several major tokens dropping close to 10%. Dogecoin and Hyperliquid's HYPE were the weakest performers, falling 9.6% and 9.9%, respectively. Ether and XRP also slid, down 8.4% and 7.8%, while Solana and Tron held up relatively well. Bitcoin fared a bit better than the rest, losing 5.3% and trading near $60,345 (€52,900) after briefly touching about $58,800 (€51,600).
Investors Shift Focus to AI Stocks
The crypto selloff came as more investor money flowed into stocks tied to the artificial intelligence (AI) theme. Chipmakers, which had been driving much of the market earlier, gave back some of those gains, while a wider group of companies with steadier growth profiles moved higher. The equal-weighted S&P 500 even set a new record, despite the main index ending the session nearly flat.
That shift suggests a broader reset in market leadership, with enthusiasm for AI still intact but tempered by worries about stretched valuations. Capital is spreading across more sectors now, and crypto is not benefiting from that rotation. It also fits a wider move toward traditional and dollar-linked assets that is showing up in crypto as well, including the preference for less narrative-driven positions.
How Macro Factors Are Affecting Crypto
On top of the broader rotation, several crypto-specific pressures are weighing on prices. Outflows from U.S. spot Bitcoin ETFs, the Federal Reserve's relatively high interest-rate stance, and a stronger dollar are all adding to the downside. Bitcoin is still hovering near its 200-week moving average, a technical level that has often lined up with longer periods of weakness. Sticky inflation and a hawkish Fed remain a major headwind, as seen in the recent drop to its lowest level since 2024.
Analysts are also watching a familiar pattern of steep drops followed by quick buying, which points to margin liquidations before rebound attempts. At the same time, institutional sentiment keeps deteriorating, raising the risk of more pressure and occasional selloffs from leveraged traders.
Why This Matters for European Crypto Investors
For European investors, this could be a sign that crypto is heading into a more volatile stretch, driven by global macro forces and changing investor preferences. The move into AI stocks, along with the more cautious tone around crypto, may shape portfolio decisions and risk management over the next few months.
