Bitcoin slipped on Thursday as a sharp sell-off in U.S. technology shares spilled into digital assets, cutting short a rebound that had followed two days of softer-than-expected inflation data. The world’s largest cryptocurrency traded around $64,500, down about 1.5% from recent highs, after briefly climbing above $65,000 earlier in the week.
The pullback came after June inflation readings in the United States had initially helped revive appetite for risk assets. Both consumer price index and producer price index data came in below expectations, encouraging traders to wager that price pressures were cooling and that the Federal Reserve could move closer to easing monetary policy later in the year.
That optimism faded as technology stocks weakened, dragging broader market sentiment lower. Bitcoin, which has increasingly traded in line with high-growth assets during periods of macroeconomic uncertainty, followed the move lower and struggled to hold gains near a key resistance zone.
Micron Technologies was among the biggest decliners in the equity market, falling 15% during the session. The stock is now down more than 30% from its June 22 record high, marking a sharp reversal after a months-long rally in semiconductor and artificial intelligence-linked shares.
The tech-led downturn reflected profit-taking after a strong run in major technology names. The move also showed how quickly sentiment can shift when traders begin cutting exposure to crowded trades across stocks and digital assets at the same time.
Bitcoin loses momentum near $65,000
Bitcoin’s retreat from three-week highs has put renewed focus on the $65,000 to $68,000 range, where recent rallies have repeatedly stalled. The cryptocurrency had rebounded from early July lows, but the move has so far failed to attract enough follow-through buying to confirm a stronger recovery.
Market commentators tracking bitcoin’s chart structure said the latest rejection suggests that sellers remain active near overhead resistance. Short-term sentiment improved after the inflation data, but the market has not yet shown the trading volume usually associated with a durable breakout.
Exitpump, a market commentator, said an anchored volume-weighted average price measured from bitcoin’s May peak near $82,000 may continue to limit upward movement. The indicator is often used by traders to assess the average price paid over a specific period and to identify areas where supply may return to the market.
The same type of setup has appeared during earlier local downtrends, when rallies into important moving averages or volume-weighted levels failed before prices moved sideways or lower again. For now, bitcoin remains caught between improving macroeconomic expectations and weaker momentum across risk assets.
Rekt Capital, a trader and analyst, said bitcoin was showing early signs of pulling back from its 50-month exponential moving average, which sits near $65,900. He compared the current structure with patterns seen during the 2022 bear market and said the market may still need more time before forming a clearer long-term bottom later this year.
Tech sell-off pressures risk appetite
The weakness in technology shares was a key driver of Thursday’s move across risk-sensitive markets. Semiconductor stocks, software names and other high-valuation areas had risen strongly in recent months, helped by enthusiasm around artificial intelligence and expectations for lower interest rates.
When those shares began to fall, traders moved to reduce exposure in other volatile assets as well. Bitcoin and other cryptocurrencies often react quickly to changes in appetite for risk because they trade around the clock and are widely used as a liquid expression of broader market sentiment.
Data cited by The Kobeissi Letter showed retail traders sold approximately $200 million worth of Tesla and Apple shares over the past two weeks. The selling came as retail turnover in single stocks reached a record $370 billion, up from $220 billion at the beginning of 2026.
That increase in turnover shows that activity in individual equities remains high, even as some traders lock in profits. It also suggests that the recent market strength has attracted heavy short-term participation, making prices more vulnerable to quick reversals when momentum begins to fade.
Bitcoin’s reaction to the equity sell-off shows that traders are still treating the cryptocurrency as part of the broader high-beta market. While bitcoin has its own supply dynamics and network fundamentals, short-term price action continues to be influenced by moves in U.S. stocks, Treasury yields, the dollar and expectations for Federal Reserve policy.
Inflation relief meets Fed uncertainty
The softer cpi and ppi readings gave markets a reason to rally earlier in the week. Lower inflation can reduce pressure on the Federal Reserve to keep interest rates elevated, which is generally supportive for assets that do not produce yield, including bitcoin.
But Thursday’s reversal showed that inflation relief alone may not be enough to restart a strong uptrend. Traders are now waiting for the next Federal Reserve decision and any updated guidance from policymakers on the likely path of interest rates.
If the Fed signals that it is comfortable with disinflation and sees room to cut rates, risk assets could regain support. If officials remain cautious, bitcoin may remain under pressure near resistance as traders reassess the timing and scale of potential policy easing.
The market is also watching whether improved inflation data will translate into stronger flows across digital asset products. So far, demand has been uneven. Large products have continued to attract capital, but spot trading activity has weakened sharply compared with previous quarters.
Spot trading volumes remain weak
Industry market data compiled outside trading venues showed centralized spot volume fell to exactly $3 trillion during the second quarter. The drop highlights a slowdown in day-to-day trading across digital assets and points to reduced participation from retail traders.
Lower volume can make rallies harder to sustain because there is less immediate demand to absorb selling near resistance. Thin trading conditions can also exaggerate short-term price moves, especially when large orders hit the market during periods of weaker liquidity.
The decline in spot activity contrasts with the continued growth of regulated products tied to bitcoin. Institutional products pulled in exactly $510 million over three days in early July, while total net assets held in United States spot bitcoin funds stood at $74.79 billion.
That split has become an important feature of the current market. On one side, spot trading activity across crypto venues has cooled, suggesting weaker speculative demand from smaller traders. On the other, large regulated products continue to hold substantial assets, showing that longer-term exposure to bitcoin remains present through traditional market channels.
For price action, this creates a mixed backdrop. Strong fund assets can provide a base of support, but weak spot turnover can limit upside momentum if traders do not return in larger numbers.
Support near $60,000 draws attention
With bitcoin unable to hold above $65,000, attention has turned back to lower support zones. The area around $60,000 is widely viewed by traders as an important level because it has acted as both support and a psychological marker during earlier phases of the market.
A clean break below that region could invite more selling and force a reassessment of the broader recovery attempt. Holding above it, however, would suggest that buyers are still willing to defend the lower end of the recent range.
Some market participants have argued that chasing sudden daily price jumps remains risky while bitcoin trades under heavy resistance. Instead, they are watching whether price can build a base near support and whether volume improves when the market approaches major breakout levels.
The $68,000 area is another important level. A move through that zone with strong volume would suggest that buyers have regained control and that the market may be ready to test higher resistance. Without that confirmation, rallies may continue to face selling pressure.
Supply trends offer a counterweight
On-chain data has provided a more constructive signal despite the choppy price action. Taha, a data analyst, said the number of large holding wallets continues to grow, indicating that some bigger market participants are accumulating or maintaining exposure even as prices move sideways.
Network metrics also show that balances held on trading venues have fallen to exactly 2.63 million available tokens. Lower available supply on trading platforms can reduce the amount of bitcoin that can be quickly sold, particularly if demand increases at the same time.
A shrinking supply on venues does not guarantee higher prices, but it can amplify moves when buying pressure returns. If large funds or active traders add exposure while exchange balances remain low, the market can become more sensitive to demand shocks.
Still, analysts caution that supply data must be viewed alongside volume and macro conditions. Bitcoin can remain under pressure even with falling exchange balances if equity markets weaken, liquidity tightens or traders become more defensive ahead of central bank decisions.
Traders turn more cautious
The latest pullback has encouraged a more defensive approach among short-term traders. Rather than assuming that weaker inflation data will automatically lead to a sustained rally, many are waiting for confirmation from price action, volume and the Federal Reserve.
Tight risk management has become more important because bitcoin is once again moving closely with technology stocks. A deeper slide in the tech sector could pull digital assets lower, particularly if traders continue to reduce exposure to volatile markets.
For now, bitcoin appears to be in a holding pattern. The market has support from lower inflation readings, shrinking exchange balances and continued assets in U.S. spot funds. At the same time, it faces resistance near key technical levels, weaker spot trading volume and renewed pressure from the equity market.
The next major signal may come from whether bitcoin can reclaim and hold the $65,900 to $68,000 zone with stronger volume. Until then, traders are likely to remain focused on the $60,000 support area, the direction of U.S. technology shares and the Federal Reserve’s next policy message.
Worried about Bitcoin’s latest dip? Learn how to interpret trend shifts in our crypto market sentiment guide.
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