Crypto Market Cap Drops Over 6% to $3.37 Trillion as Bitcoin Falls to $99K
The cryptocurrency market has experienced significant turbulence, shedding 6.31% of its total value and reducing the overall market cap to $3.37 trillion. Bitcoin, the largest cryptocurrency, has dropped sharply from $105K to $99K, with $100K now acting as a crucial support level. This downturn follows a combination of global economic factors and market disruptions.
DeepSeek’s Disruption in the AI and Crypto Markets
The rise of DeepSeek, a Chinese AI app, has sent shockwaves through the tech and crypto markets. Developed for under $10 million, DeepSeek has outperformed ChatGPT, which carries a valuation of $157 billion. Its rapid rise to the top of app charts has raised concerns about the overvaluation of U.S. tech stocks, particularly in the AI sector.
DeepSeek’s success has triggered anxiety in the AI market, leading to massive sell-offs in U.S. equities and AI-related tokens, which have collectively lost over 20% of their market value. The app’s open-source model, delivering high functionality at a minimal cost, has intensified fears of overvaluation in the American tech sector.
Trump’s Impact on the Crypto Market
Former President Donald Trump has played a role in shaping the current dynamics of the cryptocurrency and AI markets. His campaign for interest rate cuts and broader economic agenda have influenced market behavior, adding pressure to the Federal Reserve. Trump’s policies and public statements have introduced unpredictability, driving liquidation and downward pressure on tech and crypto assets.
Amid this uncertainty, investor panic has caused widespread asset sell-offs. Notably, Arthur Hayes has forecasted a potential financial crisis, predicting Bitcoin could correct to $70K-$75K before rebounding to $250K by year-end.
Bitcoin’s Struggles
Bitcoin has seen a sharp decline of over 5%, now trading around $99K. Earlier in the day, BTC peaked at $105K, but the $100K mark is proving to be a critical support level. A break below this level could signal further losses.
Bitcoin’s price movements are influenced by broader economic factors, including interest rate decisions and the upcoming Federal Open Market Committee (FOMC) meeting. This marks the first Federal Reserve meeting since Donald Trump’s return to office, with expectations that interest rates will remain unchanged.
The crypto market faces a volatile period, driven by global economic conditions, disruptive technological advancements, and political influence. The Federal Reserve’s upcoming decisions and Bitcoin’s ability to hold key support levels will be crucial in shaping the market’s direction.
