On Monday, January 27, bitcoin dropped below $100,000, thus falling to its lowest level in the last 11 days.
According to analysts cited by the media, the mentioned downward trajectory is driven by widespread caution against the background of the fact that the growing popularity of the Chinese artificial intelligence model DeepSeek provoked the sell-off of Western AI-related stocks.
Last week, the world’s largest cryptocurrency barely managed to achieve a stable upward dynamic. In this context, it is worth noting that the rally in which bitcoin broke above $100,000 after United States President Donald Trump’s election has ended. It is worth noting that experts have high expectations about the actions of Mr. Trump’s administration regarding the cryptocurrency industry.
On Monday morning, bitcoin was at $98,852.17. On the day, the corresponding figure fell by about 6%. Bitcoin’s decline began at the start of trading, hitting its lowest level since January 16.
The specified dynamic is observed against the background of the above-mentioned sharp drop in the value of shares of technology companies. This tendency is related to traders’ concerns that Chinese artificial intelligence startup DeepSeek could threaten the dominance of Western companies in the AI industry. It is worth noting that the machine intelligence area has actually become what can be called a space of geopolitical rivalry.
Bitcoin’s losses are seemingly driven by some risk-off sentiment circulating the markets currently due to DeepSeek. The corresponding opinion is shared by eToro analyst Simon Peters.
Geoffrey Kendrick, global head of digital asset research at Standard Chartered, said that the decline in Nasdaq futures hurt crypto markets, but the disappointment associated with the announcement of the Donald Trump administration on the cryptocurrency stockpile increased the risk of a sharp sell-off of digital assets.
It is worth noting that on the first day after the inauguration, Mr. Trump did not make any statements about cryptocurrency. For some investors, the silence from the President of the United States in the context of the mentioned issue became the factor of disappointment. In his executive order published last week, Donald Trump formed a working group to draft new crypto rules and explore a crypto stockpile, while the Securities and Exchange Commission (SEC) spiked accounting guidance, which industry representatives called an obstacle to the adoption of digital currency.
Thomas Puech, chief executive officer of digital asset hedge fund Indigo, said that the prospect of higher interest rates staying longer is a factor in the negative impact on riskier assets.
Alvin Kan, chief operating officer at Bitget Wallet, said that the hype around DeepSeek and broader volatility in the artificial intelligence market in the United States has spooked investors, leading to a flight to safety. It was also noted that with the Federal Reserve’s next monetary policy meeting approaching and expectations that interest rates will not be cut, the market is pricing in a more hawkish tone, which reinforces cautious sentiment.
The central bank of the United States will decide on the cost of borrowing as early as this week. The prevailing opinion among analysts is that the corresponding indicator will not change and will remain in the current range from 4.25% to 4.5%.
At the same time, Matrixport analysts, despite various difficulties and challenges, remain optimistic, for which negative market sentiment is not the final guarantee of the upcoming unfavorable tendencies. This crypto services company noted that the celebration of the Lunar New Year in Asia during the current week is the most statistically favorable 20-day window for bitcoin.
As we have reported earlier, Fake DeepSeek Token Hits $48 Million Market Cap.
