IREN Limited (IREN) shares are getting hammered on Thursday, dropping nearly 5% and reversing the gains from Wednesday's big news about a new data center campus in Australia. So what's going on?

Blame Bitcoin

The main culprit is a nasty sell-off in the broader cryptocurrency market. Bitcoin (BTC) just slipped below the $63,000 mark, and that's pulling down the whole crypto-infrastructure sector. IREN, despite its best efforts to rebrand as an AI play, still has deep ties to digital asset mining. That means when Bitcoin sneezes, IREN catches a cold.

The AI Pivot Isn't a Shield

IREN has been making a big push into artificial intelligence, running data centers powered by renewable energy in Canada and the U.S., and even working with Microsoft. But market experts say the company's historical roots in Bitcoin mining leave it exposed to crypto volatility. The transition is real, but it's not complete—and the market is treating IREN like a crypto stock for now.

Short Interest: Still a Factor

Short interest in IREN has actually come down a bit, from 58.36 million shares to 50.94 million shares in the latest reporting period. That's still 14.72% of the float sold short, which is a lot. But with average daily trading volume of 64 million shares, it would take shorts only about a day to cover. So the squeeze potential is there, but it's not the main story today.

Bundey Campus: The Big Picture

Wednesday's rally was all about the Bundey campus in South Australia—a planned 800MW data center that IREN says will be energized starting in 2028. Co-founder and co-CEO Daniel Roberts touted the region's "clean energy, connectivity and policy support needed for AI infrastructure development at scale." That's a long-term play, and Thursday's pullback doesn't change the narrative. It's just the market being the market.

Technical Check: Still Bullish, But Pulling Back

Zooming out, IREN's trend is still positive. The stock is trading about 3.5% above its 20-day moving average of $58.78 and roughly 31% above its 200-day moving average of $46.39. The 20-day is above the 50-day, and the 50-day is above the 200-day—that's a classic bullish stack. But the stock is still below its 52-week high of $76.87, and after a swing high in May, this pullback looks like a healthy breather within an uptrend.

At the time of publication, IREN shares were down 4.96% at $62.44.