Home Crypto News Bitcoin Falls Below $100,000 Amid DeepSeek Hype

Bitcoin Falls Below $100,000 Amid DeepSeek Hype

27 Jan, 2025 Crypto News

Bitcoin Falls Below $100,000 Amid DeepSeek Hype

Bitcoin has dropped below $100,000 for the first time since US President Donald Trump took office on Jan. 20, as global markets reacted to increased competition in the AI sector and evolving monetary policies.

The cryptocurrency, which holds the largest market capitalization, reached a low of $98,046 on Jan. 27.

The turbulence is largely linked to the rapid rise of China-based AI app DeepSeek, which claimed the top spot on Apple’s App Store rankings in the US, pushing ChatGPT down to third place just a week after its debut.

“The hype around DeepSeek and broader volatility in the US AI market has spooked investors, leading to a flight to safety,” said Alvin Kan, chief operating officer at Bitget Wallet, in a statement shared with Cointelegraph.

“With the next Federal Reserve meeting approaching and expectations of no rate cuts, the market is pricing in a more hawkish tone, adding to the cautious mood,” Kan added.

DeepSeek’s AI model, reportedly developed with a $6 million budget, has heightened concerns over an intensifying AI arms race, with its success creating ripple effects across global markets.

Nvidia, whose dominance in the AI boom brought its valuation to an impressive $3.49 trillion, saw its shares decline by 3.12% by the Jan. 24 close.

Kobeissi Newsletter has highlighted key chip stocks and their negative reactions to DeepSeek's success.

In the crypto market, approximately $864 million in positions were liquidated, with Bitcoin long positions accounting for $250 million alone, according to data from CoinGlass.

“Some derivatives who put bullish positions on margin got called,” Justin d’Anethan, head of sales at token launch advisory firm Liquifi, told Cointelegraph.

“The scramble for downside protection suggests traders are bracing for further chop. With no major catalysts until this week’s [Federal Open Market Committee], the market is likely to hover in this range as it waits for fresh policy cues,” he added.

The US Federal Reserve’s first interest rate decision under President Trump is set for Jan. 28 and Jan. 29, with rates expected to remain steady at 4.25% to 4.5%, according to the CME FedWatch tool.

However, analysts at Matrixport offer a bullish perspective despite the prevailing negative sentiment.

The crypto services firm highlights the Chinese New Year and Lunar New Year celebrations in Asia, describing this period as the “most statistically favorable 20-day window for Bitcoin.”

Sources:

https://cointelegraph.com/news/bitcoin-falls-below-100k-under-trump-presidency

https://apps.apple.com/us/charts/iphone

https://x.com/saylor/status/1883665989944090754

https://www.nasdaq.com/market-activity/stocks/nvda

https://www.coinglass.com/LiquidationData

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

https://x.com/Matrixport_EN/status/1882699870559170671

Back to Crypto News
Related articles
Cryptocurrencies on CoinMarketCap Near 11 Million

Crypto News

Cryptocurrencies on CoinMarketCap Near 11 Million

Grayscale Introduces Dogecoin Investment Fund

Crypto News

Grayscale Introduces Dogecoin Investment Fund

Bitcoin Hits New All-time High Near $110,000

Crypto News

Bitcoin Hits New All-time High Near $110,000

AI Token Market Cap Could Reach $60 Billion

Crypto News

AI Token Market Cap Could Reach $60 Billion

Don’t miss any crypto news

Subscribe to our Newsletters - the best way to stay informed about the crypto world. No spam. You can unsubscribe anytime.

By sharing your email, you consent to receiving BITmarket’s newsletter. Read how we process your data in our Privacy policy

You’ve made us very happy 😊

Subscribe to our Newsletters - the best way to stay informed about the crypto world. No spam. You can unsubscribe anytime.

Something went wrong 😔

If your problem persists please try contact our support