Macro Pressure and Tech Weakness: Bitcoin in a Holding Pattern

When AI Stocks Overheat, Bitcoin Could Benefit

Bitcoin is currently moving in a difficult macroeconomic environment: rising yields, persistent inflation, and weakening tech momentum are weighing on the price. But surprisingly, the overheating of AI stocks could become the catalyst for Bitcoin's next rally in the medium term. Macroeconomist Lyn Alden sees an opportunity for BTC in a possible capital rotation out of overvalued tech stocks—even though the path there is likely to be bumpy.

The current situation exemplifies how closely Bitcoin is intertwined with broader market risk appetite. Recent U.S. economic data paints an uncomfortable picture: weaker growth alongside rising inflation—a combination that rarely benefits risk assets.

The Facts

Bitcoin is currently trading at around $67,849 and is thus nearly 46 percent below its all-time high of $126,100 from October ^[1]. Over the past 30 days, the cryptocurrency has lost 24.49 percent of its value ^[1]. But macroeconomist Lyn Alden sees a potential opportunity precisely in this weakness phase: "It could be that AI stocks eventually reach their peak—they become so ridiculously large that they realistically can't go much higher," Alden explained on the Coin Stories Podcast ^[1].

When assets reach a price level where further gains are difficult to justify, capital often flows into other opportunities with more upside potential ^[1]. This rotation could benefit Bitcoin. Chip giant Nvidia, the largest company on the Nasdaq by market capitalization, is particularly in focus. Jason Ware, Chief Investment Officer at Albion Financial Group, called Nvidia "probably the most important company and the most important stock in America" ^[1]. The stock has gained 35.48 percent over the past twelve months ^[1], but the question remains: can this growth continue to support the valuation?

Bitcoin developer Mark Carallo put it bluntly: Bitcoin is now competing for capital in a way it never has before ^[1]. The increased attention on artificial intelligence is tying up investor money that might previously have flowed into cryptocurrencies.

But Alden adds perspective: Bitcoin doesn't need massive capital inflows for a recovery. "It only takes a modest amount of new demand," the economist says ^[1]. Long-term holders essentially form the floor, while short-term traders rotate out. "The coins move from fast hands to strong hands—these are buyers who really don't want to part with it unless the price goes up five times or more" ^[1].

Meanwhile, the macroeconomic environment is deteriorating. Current U.S. economic data shows a problematic mix: GDP for Q4 2025 came in at 1.4 percent, significantly below expectations ^[2]. At the same time, PCE inflation rose to 2.9 percent, while core PCE climbed to 3.0 percent—the highest level since November 2023 and above expectations ^[2]. This combination of weak growth and stubborn inflation makes loose monetary policy difficult for the Federal Reserve. The interest rate market is pricing in unchanged rates at the next Fed meeting on March 18 with 94 percent probability, with only six percent for a cut ^[2].

For Bitcoin, this is a difficult regime: "When markets are playing the mix of less growth and sticky inflation, risk premiums become more expensive, liquidity is deployed more cautiously, and high-beta positions are reduced first," analyzes BTC Echo ^[2]. Leading tech stocks are also showing signs of weakness. The Nasdaq 100 is showing a shift to previous highs—a warning signal for weakening upward momentum ^[2]. The software sector in particular is under pressure, while even AI leaders like Nvidia are showing less trend momentum than before ^[2].

Alden warns against excessive expectations for a quick recovery: "Bitcoin rarely forms V-shaped bottoms outside of COVID-stimulus-type events," she explains ^[1]. Normally, Bitcoin reaches a low level and then moves sideways for an extended period. "I think we're more in a grinding phase," Alden says, considering further moves of $10,000 to $20,000 downward possible ^[1].

Analysis & Context

The current situation fits a familiar pattern: Bitcoin as a high-beta asset typically follows broader risk assets during phases of macroeconomic uncertainty. The decoupling thesis—Bitcoin as an uncorrelated asset—proves fragile in such phases. Particularly relevant is the observation on the midterm cycle: historically, years with U.S. midterm elections have frequently seen significant pullbacks before markets stabilized the following year ^[2]. Since the midterm elections take place in November 2026, 2026 could be a year of elevated volatility, while the period until June 2027 has historically been constructive.

For Bitcoin investors, this context is important: a durable bottom formation is unlikely as long as U.S. equities remain unstable and financing conditions don't ease. But precisely this clearing phase could lay the foundation for a more sustainable recovery in the medium term.

Alden's core thesis on capital rotation from overvalued AI stocks is logical, but the timing remains unclear. History shows that overvaluations can persist longer than seems rational. At the same time, Bitcoin has repeatedly benefited from rotations from other asset classes in previous cycles—whether from gold during the COVID pandemic or from tech stocks after their peaks. The fact that Bitcoin only needs "marginal" new demand is a structural advantage: the supply side is strongly absorbed by long-term holders, while the limited supply amplifies any demand surge.

The coming months are likely to be decisive: will the tech heavyweights stabilize or will the weakness expand? Will rate cut expectations shift back or will yields remain high? The answers to these questions will determine whether Bitcoin goes through the bottom-formation phase Alden outlines or slides even deeper. For long-term oriented investors, however, this consolidation phase could provide exactly the accumulation opportunity that will retrospectively appear attractive.

Conclusion

• Bitcoin is in an extended consolidation phase that, according to Alden, could last several more months and include further downward moves of $10,000 to $20,000—V-shaped recoveries are historically the exception

• A possible overvaluation of AI stocks like Nvidia could trigger capital rotation toward Bitcoin in the medium term, but the timing remains uncertain and depends heavily on tech market developments

• The combination of weak economic growth and persistent inflation makes loose Fed policy difficult and weighs on Bitcoin as a high-beta asset—a sustainable recovery is unlikely as long as macroeconomic conditions don't improve

• The historical midterm cycle suggests elevated volatility in 2026 but could create a more constructive environment in 2027—patience and a longer-term perspective currently appear more important than attempting to time short-term movements

• Structurally, Bitcoin remains well-positioned due to its limited availability and strong holder base: it only needs marginal new demand to trigger significant price movements once the macroeconomic regime shifts