AI bubble to be main risk for the cryptocurrency market

[Ben Graham]

Following a recent interview with Galaxy Digital CEO Mike Novogratz, where he shared his forecasts—details of which I covered yesterday—there is another significant interview with Tether CEO Paolo Ardoino that deserves attention.

According to Ardoino, the AI bubble is the primary risk for Bitcoin in 2026. Given the strong correlation of BTC with traditional capital markets, this makes Bitcoin vulnerable to shocks from a potential burst in the AI bubble. The company believes that if sentiments around AI turn negative in 2026, it will trigger turmoil in the US stock market, resulting in Bitcoin dropping alongside it. However, regarding optimistic views, sharp corrections of BTC by 80%, as seen in 2022 or 2018, are not anticipated. The increasing institutional demand creates a more stable foundation for digital gold.

Nevertheless, not all experts share Tether's CEO's concerns regarding artificial intelligence. Some argue that even if there is a correction in the AI market, Bitcoin's long-term prospects remain positive. They explain this by noting that more institutional investors view BTC as a hedge against inflation and a protection against geopolitical risks. Furthermore, the acceptance of cryptocurrencies in various countries and the launch of ETFs continue to grow, providing additional support for Bitcoin's price.

A key factor influencing BTC's price in 2026 will also be regulatory policies, changes in interest rates by central banks, and inflation. All of this will continue to affect all markets, including the cryptocurrency market.

Trading recommendations:

In terms of the technical outlook for Bitcoin, buyers are currently targeting a return to the $87,600 level, which opens a direct path to $89,600, and from there, it would not be far to $92,300. The ultimate target will be around the peak at $95,000, and surpassing this level would indicate attempts to return to a bullish market. Should Bitcoin decline, I expect buyers at the $85,400 level. A return of the trading instrument below this area could quickly push BTC down to around $83,200, with the further target being the $81,200 region.

For Ethereum, clear consolidation above the $2,997 level opens a direct path to $3,105. The ultimate target will be around the peak at $3,233, and surpassing this level would indicate a strengthening of bullish market sentiments and renewed buyer interest. If Ethereum declines, I expect buyers at the $2,858 level. A drop below this area could swiftly send ETH down to around $2,763, with the further target being the $2,684 region.

What we see on the chart:

- Red lines indicate support and resistance levels where either a price slowdown or active growth is expected;

- Green lines indicate the 50-day moving average;

- Blue lines indicate the 100-day moving average;

- Light green lines indicate the 200-day moving average.

Typically, a crossover or price test of these moving averages either halts market momentum or sets a new directional impulse.

The material has been provided by InstaForex Company - www.instaforex.com