Russell Thompson, CIO at Hilbert Group, warns that a decline in AI and semiconductor stocks could trigger broader portfolio liquidations. If Bitcoin drops below the key support level of $71 900, the price may fall toward $65 000, with minimal technical support near the $70 000 mark.
The firm reported that Bitcoin ETFs saw outflows of approximately $1.2 billion last week. Hilbert’s proprietary liquidity indicators have weakened, with the five-factor model dropping to 2.61 and the six-factor model reaching 3.02. Additionally, options markets currently show increased demand for downside protection.
Thompson noted that the Nasdaq fell 6% on the previous Thursday, creating pressure on hedge funds. He suggests that margin calls may force investors to sell non-core assets, specifically Bitcoin. Market pricing currently assigns a 77% probability to a Federal Reserve rate hike in December.
Despite the current bearish outlook, Thompson anticipates that capital may return to crypto markets as investors unwind positions in technology and AI stocks. He maintains that a Bitcoin breakout remains possible before the end of the year, provided the current deleveraging period subsides.
