Tech stocks continued to decline amid concerns over valuations of AI-related stocks, with the S&P 500 index falling for four consecutive days, marking its longest losing streak since August. Bitcoin led the decline in the Asian session yesterday, hitting a low of $89,253 before gradually rebounding, and was reported at $92,279 as of the deadline. The overall cryptocurrency market capitalization rose 1.76% to $3.17 trillion, but with Bitcoin breaking below the key support level of 93K-94K that everyone had been watching, as well as the average cost basis of ETF investors at $89,600, investor confidence has been severely shaken, and market sentiment remains in extreme fear at 15.

Nvidia Earnings Imminent, Stock Down 10%

Ahead of Nvidia's third-quarter earnings release after the market close on Wednesday, the company's stock has plunged more than 10% this month. Nvidia's earnings come at the tail end of a strong earnings season, and this year's AI-driven market rally has become a point of contention. Amid a surge in bond issuances by major tech companies, concerns about overvalued tech stocks and the soundness of AI fundamentals have put Nvidia's share price under scrutiny.

Sam Stovall, Chief Investment Strategist at CFRA, said:

"If the top company within the top industry within the top sector says very optimistic things about the future while at the same time reporting better than expected earnings, revenues and profit margins, I think that would go a very long way to calming investor nerves. The real question is, ‘When do we monetize all of this capex?’ And that’s something that’s not going to happen this quarter or next, but it is something that is expected in the not too distant future."

A major AI partnership announced on Tuesday failed to boost related stocks as similar deals have in the past. AI startup Anthropic announced a commitment to purchase $30 billion in Azure computing resources, expanding Claude beyond Microsoft's Azure, with Nvidia and Microsoft committing $10 billion and $5 billion in investments to Anthropic, respectively. After the deal was completed, Nvidia and Microsoft's stocks still fell sharply.

Bitcoin Rebounds After Dipping Below $90K, Worst Case Could See $80K

Bitcoin led the decline in the Asian session yesterday, hitting a low of $89,253 before gradually rebounding, and was reported at $92,279 as of the deadline.

The overall cryptocurrency market capitalization rose 1.76% to $3.17 trillion, but with Bitcoin breaking below the key support level of 93K-94K that everyone had been watching, as well as the average cost basis of ETF investors at $89,600, investor confidence has been severely shaken, and market sentiment remains in extreme fear.

Tightening USD liquidity has been the main driver of the current crypto market decline. Risk assets can be expected to face deeper corrections in the short term, and the market will only truly return to bullish territory once the U.S. government and the Federal Reserve restart the money printing machine.

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