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Bitcoin CRASH back below $100k: What's happening?
By Davide Grammatica
Incoming FOMC and new DeepSeek (Chinese AI) case weigh on markets and especially Bitcoin, which loses $100k support again
New problems for Bitcoin
The week opens in the red. Troubled stock markets have had a major impact on Bitcoin, which is down about 6 percent in 24 hours and again loses $100k support in a particularly volatile January.
Traders reacted in various ways. There are those who have been quiet about a healthy correction ahead of a more solid uptrend, and those who have reevaluated downward their local low in the medium term. Arthur Hayes, for example, has predicted a collapse for BTC to $75,000 (support from which it may touch $250k by 2025).
Reversing the order of my tryptic essay series.
The Ugly will be published tomorrow morning. I am calling for a $70k to $75k correction in $BTC, a mini financial crisis, and a resumption of money printing that will send us to $250k by the end of the year. pic.twitter.com/wohvbKkXOf
— Arthur Hayes (@CryptoHayes) January 27, 2025
Macroeconomic appointments are a major variable in determining the future of the premier cryptocurrency. With the FOMC coming up, an abrupt halt to the interest rate cuts that began in 2023 (and that had supported BTC’s rise) is expected. This, despite a particularly upbeat Donald Trump “demanding” further cuts under his new economic-energy policy. A confrontation with Fed Chairman Jerome Powell, or a response from the latter, is expected at this point.
The DeepSeek case
What seems to have most affected the performance of the first cryptocurrency, however, seems to be the sudden correction in the stock market, born out of therise of the Chinese AI startup DeepSeek, now (and suddenly) in direct competition with ChatGPT. Nasdaq futures plummeted 2 percent on Jan. 27, and U.S. stocks as a whole are likely to lose more than $1 trillion in value at the open.
It has caused a stir, in reference to DeepSeek and ChatGPT, the significant price difference between the two products, topping a series of advantages already identified by users in favor of the Chinese platform (free on the Apple Store). In this sense, the sudden concern of investors in US big tech is a natural consequence.
It will be necessary to observe, having arrived at this point, the behavior of BTC in relation to the movement of the stock market. “In 2024, BTC and the Nasdaq showed a historically strong correlation, which has now reached unprecedented levels,” reads an analysis by CryptoQuant. “And a similar trend can be observed with the S&P 500, although there have been brief periods of decoupling.”
