(MENAFN- crypto Breaking)
As January comes to an end, the Cryptocurrency market has seen a notable drop, impacting bitcoin (BTC ) and other digital assets due to a larger sell-off in the tech sector.
Bitcoin 's value decreased by 3% to $101,400, with lows reaching $97,750 earlier. The CoinDesk 20 index, which monitors a weighted average of various cryptocurrencies, saw a 7% decline, showing a cooling in the overall market after hitting record highs earlier this month.
Nasdaq Declines Over 3% Amid DeepSeek's AI Advancements Concerns
The nasdaq composite index, known for its tech focus, also experienced a decline of over 3%, partly due to concerns surrounding a Chinese startup called DeepSeek.
DeepSeek recently unveiled a competitive artificial intelligence model at a fraction of the cost of existing solutions, raising worries about potential shifts in US dominance in AI technology.
This news has sparked concerns about Big Tech's investments in AI models and data centers, intensifying the sell-off in tech stocks in the US market.
Before trading officially opened, leading cryptocurrency exchange stocks like Coinbase and MicroStrategy each saw a 2% decrease. Bitcoin mining companies suffered larger hits, with Core Scientific witnessing a 21% drop in shares, while Terawulf and Iren (formerly Iris Energy) lost 16% each.
The correlation between the cryptocurrency market and the tech sector remains evident, noted by Standard Chartered analyst Geoff Kendrick, who highlighted Bitcoin 's closer alignment with Nasdaq movements than with traditional safe-haven assets like gold.
Bitcoin Traders Face Long Liquidations
The market's volatility was further intensified by significant liquidations among traders who had bet against a downturn, leading to over $250 million in long liquidations in the past 24 hours. Leveraged traders were forced to sell their Bitcoin holdings to cover losses.
This wave of selling coincided with a mixed reaction to President Donald Trump's recent executive order on cryptocurrency, which did not meet all investor expectations.
Many traders were disappointed that the executive order did not establish a dedicated stockpile of Bitcoin , indicating a more passive approach to holding assets rather than a strategy of regular purchases.
Kendrick emphasized that current market dynamics make digital assets vulnerable to sharp sell-offs, whether driven internally or by external factors like the tech sector.
With the uncertainty surrounding the executive order resolved, attention has shifted to the upcoming Federal Reserve meeting scheduled to conclude on Wednesday.
Market strategist Joel Kruger of LMAX stated that investors are anxiously awaiting the Fed's stance, hoping for a more accommodating approach while fearing a lack of the desired dovish tone.
Despite recent price drops, Kruger assured investors that the overall trend in Bitcoin remains positive, stating,“When we look at the Bitcoin chart, there is nothing bearish about the price action.”
Featured image from DALL-E, chart from TradingView .com
Crypto Investing Risk Warning
Crypto assets are highly volatile. Your capital is at risk.
Don't invest unless you're prepared to lose all the money you invest.
This is a high-risk investment, and you should not expect to be protected if something goes wrong.
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