BTIG’s chief market technician Jonathan Krinsky delivered a blunt assessment on July 27: the semiconductor selloff that has rattled tech portfolios for weeks is not done yet. The AI trade, which powered one of the most aggressive rallies in recent memory, still has room to correct further.

The technical case for more pain

Krinsky has been waving red flags since May 2026. His argument is straightforward: semiconductor and AI-related stocks got parabolic, market breadth narrowed dangerously, and the momentum indicators that fueled the rally started fading well before prices caught up.

He estimated a potential 9-10% downside for tech stocks based on overbought conditions and the lack of broad market leadership.

On July 17, Krinsky told clients it was “premature to look for a bottom” in semiconductor stocks. Ten days later, his stance hasn’t softened. The correction, in his view, is still developing.

Why crypto can’t ignore the AI unwind

Look, BTIG’s reports contain zero mentions of Bitcoin, Ethereum, or any digital asset. Krinsky’s focus is entirely on semiconductors and traditional tech equities. But the correlation between risk-on tech trades and crypto markets has been a persistent feature of this cycle.

Institutional allocators increasingly treat crypto as part of a broader risk bucket. When they de-risk from overextended tech positions, the rebalancing doesn’t politely skip over digital assets. Portfolio managers pulling exposure from AI-adjacent trades tend to trim across correlated positions, and crypto sits firmly in that bucket whether purists like it or not.

What investors should actually watch

For crypto-focused portfolios, if semiconductor stocks do have another 9-10% of downside from where Krinsky began flagging risks, the spillover into risk assets could pressure Bitcoin and major altcoins even if nothing changes in crypto-specific fundamentals.

The AI narrative has been one of the strongest cross-asset themes connecting traditional markets and crypto. AI-related tokens rode the semiconductor wave higher, borrowing credibility and momentum from the broader story. Now that the broader story is fracturing, those tokens face a double threat: general risk-off sentiment plus the evaporation of their specific narrative catalyst.

Traders should be watching semiconductor breadth indicators and tech sector fund flows as leading signals for crypto market conditions. When BTIG’s technicians say the correction isn’t over, they’re implicitly describing a risk environment that extends well beyond chip stocks.