Wall Street's AI trade suffered a brutal pullback last week, with investors beginning to question tech stock valuations and worry that AI regulation could tighten. Bitcoin weakened accordingly, at one point falling to $75,000.
But then a notable divergence emerged: the Nasdaq rebounded 1.1% on Friday, while Bitcoin was still hovering near $76,000 over the weekend, clearly below its previous rebound level of regaining $80,000. The question is whether Bitcoin's bearish outlook will last longer than that of the stock market.
AI selloff exposes Bitcoin's fragility
This round of selling hit semiconductor stocks especially hard. Market research published by Bitunix on November 6 showed that Nvidia fell 15% during the reporting week, with Intel and Micron posting even larger declines.
The market's first concern was political factors. Democratic victories in the midterm elections raised market expectations for stricter regulation of AI development. A proposal introduced before the election to ban artificial superintelligence further added regulatory uncertainty, though its eventual passage remains far from certain.
For Bitcoin, the bigger concern comes from the financial side. Tech stocks and cryptocurrencies both rely heavily on investors' risk appetite. If capital continues to flee speculative assets, Bitcoin could face selling pressure even if AI stocks do not see another round of sharp declines.
Why the crypto market was initially more resilient
Bitunix research found that cryptocurrencies were relatively resilient during the stock market's initial decline. Of the 300 leading tokens tracked by the exchange, about half recorded weekly gains, with a median return of only -0.06%.
Some small-cap assets performed more strongly. CAP rose 34.54%, even though the total value locked in its underlying protocol fell from nearly $300 million to about $180 million. This divergence suggests that selective speculative buying continued even as overall confidence weakened. However, Bitunix analysts warned that the market still "lacks a clear catalyst to drive sustained upside."
Why Bitcoin may face more selling pressure
The latest institutional data added another layer of concern. From November 2 to November 6, U.S. spot Bitcoin ETFs recorded $1.28 billion in net outflows, with about $412 million withdrawn on Friday alone. This selling pressure continued even as tech stocks began to rebound.
Meanwhile, the Federal Reserve became another obstacle. The U.S. employment report released on Friday was stronger than expected, increasing market bets on another rate hike. Rising interest rates weaken demand for speculative assets while making safer, yield-generating assets more attractive. Even a rebound in AI valuations may struggle to offset these pressures.
Market expectations for another 25-basis-point rate hike in December rose to a new high of 80% after the October employment report. The U.S. economy added 100,000 more jobs last month than expected.
What could bring Bitcoin buyers back?
The next test is the U.S. inflation report due on November 10. Softer inflation could ease pressure on the Federal Reserve and support risk assets; persistently stubborn inflation would reinforce the case for tighter monetary policy.
Beyond the inflation report, investors should also watch whether Bitcoin ETFs can resume sustained net inflows and whether Bitcoin can reclaim the recent $80,000 threshold. Until these conditions improve, a Wall Street rebound may only give Bitcoin temporary relief rather than establish a lasting recovery.
