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▲ Bitcoin (BTC), virtual assets, cryptocurrency, cryptocurrency decline/ChatGPT generated image
Bitcoin (BTC) has failed to reclaim the $80,000 mark and has turned to a downward trend, hitting a double whammy of slowing growth in the artificial intelligence (AI) industry and uncertainty regarding the passage of a regulatory bill in the Senate.
According to a report by virtual asset specialized media outlet Cointelegraph on April 29 (local time), Bitcoin lost its upward momentum and fell to the $76,000 level due to the cooling of the artificial intelligence industry's fervor and the decreased likelihood of approval for the U.S. crypto market structure bill (CLARITY). This is a result of speculative funds flowing into the virtual asset market rapidly shrinking as AI-related stocks, such as NVIDIA, which had been driving market growth, underwent adjustments.
The U.S. crypto market structure bill, crucial for institutional adoption, has been stalled by political infighting. Democratic senators are delaying the bill's processing, demanding strict ethical regulations be applied to the virtual asset businesses of former U.S. President Donald Trump's family. As a result, the probability of the bill passing the standing committee in May has sharply decreased, leading to a flood of disappointed selling by institutional investors who had hoped for legal stability.
Technical indicators also warn of further downside risk for Bitcoin. Bitcoin recently failed to break through the $79,000 resistance level, which is the average purchase price for investors, and is fighting a tough battle for support between the 20-day and 50-day moving averages. The market suggests that if Bitcoin fails to rise above the 200-day exponential moving average of $82,000, the psychological bottom line could collapse.
On-chain data also clearly shows capital outflow. With liquidity supply in major lending protocols like Aave stagnating, investors are turning to traditional financial assets that guarantee tangible returns. The pace of capital inflow into Bitcoin spot ETFs has also significantly slowed compared to the first quarter, indicating that large investors, concerned about macroeconomic volatility, have adopted a wait-and-see approach.
The virtual asset industry is closely monitoring the future earnings reports of AI companies and the Senate's discussion process for the bill. If Bitcoin fails to maintain its current support level, there is a high possibility of a cascading collapse of altcoins due to worsening investor sentiment. Investors are maintaining a conservative position, checking for breakthroughs of key technical resistance levels and the process of reaching regulatory consensus among politicians.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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