The price of Bitcoin (BTC) has fallen below $ 98,000, returning from $ 105,000 to just $ 97,750 today, which means a sudden drop by as much as -6.8%. Swift sale coincides with increased variability both on the cryptocurrency market and the time-honored market, and many factors contribute to the BTC relegation spiral.

Why is Bitcoin falling today?

#1 The unexpected influence of Deepseek on technological markets

It seems that the main factor affecting a broader risk attitude is the appearance of Deepseek, a Chinese artificial intelligence platform (AI), whose rapid development and profitability shocked American technological giants. A well -known portal with market comments The Kobeissi Letter sent by X:

“Term contracts NASDAQ 100 have now dropped by -330 points from the opening of the market just a few hours ago, when Deepseek ranks first at the App Store. Hence, you know that Deepseek has become the main threat to American companies dealing with large companies. The stock exchange is not lying. “

Deepseek apparently competes with chatgpt, but was developed for a fraction of costs and using less advanced equipment. Comparative tests indicate that Deepseek exceeds CHATGPT in categories such as Aime, Math-500 and GPQA, arousing concern that the dominance of American companies dealing with artificial intelligence can be threatened.

The Kobeissi letter was added: “Openai … was valued at ~ 157 billion dollars in October 2024 … employs ~ 22 times more employees than Deepseek. That is why the markets were blinded. “

Traders are afraid that if investors get capital from excessively developed AI shares, a wider technology sale may take place. This also has significant consequences for the Bitcoin market and cryptocurrencies due to its correlation. “The crypto leads when the markets are closed and it is a class of asset in a higher risk” – cryptocurrency analyst Miles Deutscher excellent via X.

However, he sees the positive sides for Bitcoin and cryptocurrencies after the AI ​​boom ceases: “If Deepseek is a knife that can (temporarily) break the bubble on AI actions, it may actually be upward for cryptocurrencies, because smoothness goes back. AI shares have consumed a lot of speculative capital that would have come to BTC/Krypto before. “

#2 Risk reduction before FOMC

Another factor contributing to the current inheritance is the widely observed risk reduction on the market before the FOMC is announced. Historically, investors re -calibrate their portfolios before the Federal Open Market Committee meetings, scheduled for January 28-29, 2025. Although the consensus indicates that interest rates can remain unchanged, more risky assets, such as Bitcoin and cryptocurrencies, often meet with sales pressure in the period preceding such ads.

Deutscher commented: “Limiting the risk before FOMC (this is very normal, especially in an environment in which we are extremely sensitive to interest rates/American dollar/liquidity).”

Deutscher also speculated whether the chairman of the Federal Reserve Jerome Powell could take a milder position, taking into account the recent change of presidency in the USA: “So … if the stock exchange shares have already fallen into panic mode, will Jerome Powell really take a super -shit? Immediately after Trump took office? I don’t know … I predict that the sale before FOMC will designate a local bottom. “

#3 No modern price catalyst after Trump’s executive order

Market participants also cite a noticeable vacuum of fresh, bullfinch messages after the first week’s release in the history of the cryptographic executive order issued by President Donald Trump. Although the order initially caused cryptimism, the lack of a modern catalyst made investors want more. Deutscher described this as “a short -term lack of” northern star “after the inauguration of Trump.”

#4 Long Liquidation Sharpting Movement

According to Couminggassa dataA series of long liquidation has intensified the inheritance. 313 683 traders have been liquidated in the last 24 hours. The total number of liquidation of cryptocurrencies reached $ 853.92 million, with long positions of $ 795.5 million.

The largest single liquidation order took place at HTX for BTC-USDT worth USD 98.46 million. Long positions worth $ 250 million were closed on the Bitcoin market itself. The rapid enhance in the number of liquidation strengthened the BTC decrease, forcing a larger number of traders to close the position. Analysts perceive these forced liquidations both as a cause and a symptom of increased variability.

At the time of publication, the BTC price was $ 98,983.

A distinguished picture created with Dall.e, chart from tadingview.com