Analyst: Bitcoin Stuck Near $65K Because Capital Is Flowing to AI

Bitcoin is stuck in a narrow $62,500, $66,900 trading band as capital flows to AI infrastructure spending rather than crypto, with Big Tech allocating $190, $205 billion to AI this year while spot Bitcoin ETFs saw only $1 billion in inflows over seven days. For institutional investors, this divergence signals that macro headwinds, elevated real yields and a strong dollar, are redirecting risk capital away from non-yielding assets, and a break above $68,000 may be required to restore momentum.

• Bitcoin traded near $65,400 after swinging between $62,500 and $66,900 over the past week, down 25% year-to-date versus AI stocks up roughly 69% since January.
• Spot Bitcoin ETFs recorded just under $1 billion in inflows over seven consecutive days, compared with $6.9 billion in outflows during May and June combined.
• Big Tech AI infrastructure spending reached $190, $205 billion annually, with Nvidia’s data center revenue up 92% year-over-year, outpacing institutional crypto fund flows significantly.

• $190-205B Big Tech AI infrastructure spending this year versus crypto fund inflows.
• 92% Nvidia data center revenue growth year-over-year, signaling concentrated capital allocation.
• $65,400 Bitcoin trading level near recent weekly midpoint, 45% below October all-time high.

Bitcoin’s inability to sustain a rally above $66,000 this week reflects a structural reallocation of institutional capital toward artificial intelligence infrastructure rather than digital assets, according to analyst Wise Crypto.

The cryptocurrency has spent the past seven days oscillating within a tight $3,600 band, unable to break decisively higher despite seven consecutive days of inflows into spot Bitcoin exchange-traded funds.

That inflow streak, totaling just under $1 billion, pales in comparison to the $6.9 billion that flowed out of the same products during May and June, underscoring the fragility of current demand.

The capital destination is clear: Big Tech firms are committing $190 billion to $205 billion annually to AI infrastructure buildout, a pace that dwarfs any recent momentum in crypto investment vehicles. Nvidia, the primary beneficiary, reported data center revenue growth of 92 percent year-over-year, attracting the bulk of risk capital seeking exposure to secular technology trends.

Over the same period since January, AI-linked equities have rallied roughly 69 percent, while Bitcoin has declined approximately 25 percent, a divergence that explains both the inflow weakness and the technical malaise.

The macro environment reinforces this reallocation by punishing non-yielding assets. Two-year Treasury yields near 4.3 percent and ten-year yields near 4.6 percent keep the dollar supported and borrowing costs elevated for speculative positions.

Real Yields and Treasury Curve Pressuring Bitcoin Above $60,000 Floor

The technical pressure on Bitcoin stems partly from shifts in real interest rates, which have climbed to post-pandemic highs.

Brent crude sitting near $94 per barrel following escalating US-Iran strikes has kept inflation expectations volatile, while ten-year Treasury Inflation-Protected Securities yields have reached approximately 2.31 percent, a level not seen since before the pandemic disrupted markets.

For an asset that produces no cash flow, these elevated real yields make holding cash and Treasury instruments more attractive than holding speculative risk assets.

Ted Pillows, a market observer tracking these cross-asset dynamics, noted Thursday that the combination of geopolitical pressure on crude and elevated real yields creates an unfavorable backdrop for Bitcoin.

He argued that defending the $64,000 level mattered more strategically than chasing a rally back toward $66,500, a view that reflects cautious sentiment even among traders who acknowledge Bitcoin’s long-term potential.

The resistance has held because sellers emerge whenever Bitcoin approaches $66,500 to $68,000, a pattern consistent with profit-taking by earlier buyers seeking to exit positions near breakeven.

Wise Crypto summarized the path forward plainly: Bitcoin requires lower inflation, falling yields, and stronger demand to break out of its $60,000, $70,000 consolidation range. None of those conditions are currently present or widely expected by consensus in the near term.

$68,000 Resistance and Double-Bottom Pattern Target $173,000 if Support Holds

Traders monitoring technical levels have identified $68,000 as the critical near-term hurdle, with a sustained break above that zone potentially opening a path toward $73,000. Michaël van de Poppe, a closely followed technical analyst, flagged that Bitcoin has already reached its target area and that holding above the 21-day moving average is necessary to maintain optionality for further upside.

However, that same $68,000 level has proven problematic historically: Bitfinex analysts noted that short-term holders who accumulated Bitcoin in the $67,900, $68,300 range tend to sell as soon as they recover their cost basis, a pattern that has capped rallies repeatedly.

Axel Adler reported that spot Bitcoin ETFs have absorbed $439 million in inflows so far this week, a modest pace that suggests institutional conviction remains mixed.

More intriguingly, the so-called Coinbase discount, a metric tracking price discrepancies between Coinbase and other venues, has persisted for 78 consecutive days and has only recently begun to narrow, hinting that some regional buying pressure may finally be emerging.

Further out, analyst EGRAG CRYPTO identified a developing double-bottom pattern on weekly timeframes that would require a weekly close above $83,000 to gain technical credibility. If validated, that setup targets $173,000 eventually, a level that would represent roughly 165 percent upside from current trading but remains conditional on both immediate support holding and macro conditions improving.

Conversely, a weekly close below $51,000 would invalidate the pattern entirely, collapsing the bull case entirely.

The immediate trigger for a Bitcoin reacceleration will likely depend on Fed signals regarding rate cuts or inflation, specifically whether the December Federal Open Market Committee meeting yields language suggesting policy relief in 2025.

If real yields remain anchored above 2.3 percent and AI spending continues absorbing incremental capital flows, Bitcoin faces structural headwinds that may keep it range-bound until macro conditions shift materially.

Nvidia’s Data Center Dominance Illustrates Capital Concentration Risk for Crypto

Nvidia’s data center revenue surged 92% year-over-year, generating an estimated $60 billion in annual data center sales alone, far outpacing the entire institutional crypto fund inflow universe.

This concentration of capital into a single semiconductor vendor reveals how macro conditions, elevated real yields above 2.5% and a strengthening dollar index near 104, have created a winner-take-most environment favoring hard-asset productivity over speculative positions.

Bitcoin’s lack of cash flows makes it uniquely vulnerable in this regime, as portfolio managers defend nominal returns through duration assets and productivity-linked equities rather than non-yielding alternatives.

Historically, crypto capital flows have moved counteryclically to equities during periods of monetary loosening or equity drawdowns. However, the 2024 AI spending cycle has inverted that relationship. During the 2020-2021 bull run, spot Bitcoin ETF inflows rarely exceeded $500 million weekly; today’s $1 billion seven-day total appears strong in isolation but masks a structural shift.

Nvidia trades near $140 per share with a forward price-to-earnings ratio above 60, yet institutional investors continue rotating into the name because AI capex commitments are multi-year and contractual. Bitcoin, by contrast, carries no such structural demand guarantees and must instead rely on sentiment reversals or macro policy shifts.

The critical question for institutional allocators remains whether the AI capex cycle will eventually satiate, or whether Nvidia and peers will sustain triple-digit revenue growth through 2025. If capex spending moderates and real yields begin to fall, a scenario that would typically benefit Bitcoin, the timing of that pivot will determine whether spot Bitcoin ETFs capture the reallocation or whether crypto remains a secondary beneficiary behind equities and duration assets.