By Rania Gule, Senior Market Analyst at XS.com – MENA
In light of the severe turmoil sweeping global markets, it is clear that what we are witnessing is not merely a transient corrective move, but rather a broad repricing of risk across the worlds of technology and artificial intelligence—whose repercussions are directly extending to digital assets, foremost among them Bitcoin, which is currently trading at $83,150. The volatility and uncertainty surrounding Big Tech, combined with the ambiguity of Federal Reserve policy, have pushed investors to reshuffle their portfolios. This has been reflected in the notable rise in Bitcoin’s correlation with the Nasdaq to its highest level in months. In my view, this increasing correlation signals that Bitcoin has temporarily lost part of its identity as an alternative asset, now moving almost entirely in sync with traditional market sentiment.
The sharp 4% drop in the Nasdaq during Thursday’s session—despite Nvidia’s strong results and optimistic forecasts—illustrates the deep concern investors feel about the massive costs of building AI infrastructure. Markets are no longer focused on quarterly profits as much as they are on the sustainability of those profits amid an aggressive race for data centers and companies’ ability to shoulder long-term debt.
From my perspective, this concern is justified, because the unprecedented rise in capital expenditure is pushing many tech companies closer to a speculative model rather than one based on predictable cash flows. And just as the Nasdaq followed this downward spiral, Bitcoin mirrored the move, falling below $86,000 for the first time since April—a fresh sign that investors are treating it as a high-risk asset rather than a safe haven.
On the other hand, overall market sentiment remains heavily influenced by fears of elevated valuations. Even so, I believe the current picture does not point to an imminent crash, but rather to a clearly defined bubble—a characterization I largely agree with. However, I also believe that a bubble does not necessarily imply a near-term explosion; bubbles can last for years before reaching an inflection point. Diversification into scarce assets such as gold appears logical at this stage, especially with rising expectations of potential wealth taxes—something I find more concerning than monetary tightening. In my view, this is a critical point: higher wealth taxes could push capital toward alternative havens, including both Bitcoin and gold.
But market sentiment shifted immediately after the release of the U.S. September jobs report, which came in higher than expected, showing 119,000 new jobs. This surprise led traders to believe that the Federal Reserve may not be ready to ease its monetary stance as hoped. At that moment, the markets reacted: futures contracts priced in only two rate cuts by January 2026, signaling renewed caution among equity and digital-asset investors. From my perspective, the market is overreacting to these figures, because U.S. debt pressures and the chronic fiscal deficit will eventually force the Fed toward a more accommodative path—whether or not it attempts to delay that message publicly.
Meanwhile, the massive spending on AI—especially data centers—is adding a new layer of uncertainty. Recent commentary from tech analysts about the “speculative nature” of these investments strongly echoes the dot-com bubble of the early 2000s, when the rush to build infrastructure far outpaced the market’s future ability to generate returns. Thus, I believe what worries investors isn’t the spending itself, but the lack of clarity on the long-term payoff of these projects. This has contributed to a decline of more than 7.8% in the Nasdaq from its October peak, triggering a rapid exit from high-risk assets.
From my point of view, this exit has driven Bitcoin’s correlation with the Nasdaq to around 80% over the past 30 days—a level clearly showing that Bitcoin investors are now behaving according to the same logic that governs tech-stock trading. This correlation could persist as long as macroeconomic conditions remain unstable, but it does not alter Bitcoin’s fundamental properties as a scarce, inflation-resistant digital asset over the long run. Traders are not necessarily pessimistic below $90,000; rather, they are waiting for clearer entry points amid conflicting macro indicators and policy expectations.
Taking all of this into account, panic sellers may end up regretting their exit, as liquidity could improve again with the ongoing U.S. debt crisis. Moreover, President Donald Trump’s push for a stimulus agenda based on “tariff distributions” could introduce an additional liquidity source that favors alternative assets. In my opinion, any return to expansionary fiscal policy in the United States would have an immediate positive impact on Bitcoin and restore its upward trajectory.
In conclusion, what we are witnessing now is a clash between two forces: an economically strained reality that heightens caution, and massive technological ambitions that are absorbing capital at an accelerating rate. Between these forces, Bitcoin stands as a mirror of market sentiment—falling when investors are fearful and rallying when liquidity improves. My outlook is that the short term will remain volatile, but the medium and long term still offer strong positive signals, because the fundamentals supporting Bitcoin’s growth have not changed, while traditional markets are entering a phase of uncertainty that could make crypto assets more attractive than they appear today.