Bitcoin Plunges Below $100K as Crypto Market Turmoil Intensifies

Bitcoin and the broader crypto market experienced a significant downturn on January 27, with Bitcoin falling below the $100,000 mark. This decline was accompanied by widespread market turbulence, impacting both crypto and stock markets. The drop in Bitcoin's price broke the momentum that had pushed it to its all-time high of $109,000 ahead of US President Donald Trump's inauguration. Analysts noted that this downturn effectively signals the end of a Trump-induced rally that defined the late 2024 market.

Arthur Hayes, the co-founder of BitMEX, warned of further declines, suggesting that Bitcoin could briefly dip to between $70,000 and $75,000. However, he remains bullish for the long term, projecting that Bitcoin will hit $250,000 before the year ends. This optimism is fueled by potential financial instability and renewed monetary easing as key catalysts.

Other major cryptocurrencies mirrored Bitcoin's trajectory, with Ethereum, BNB, Solana, XRP, Dogecoin, and Cardano each losing up to 9%. The ripple effect of the crypto market decline was also evident in US stock indices, with futures for the Nasdaq 100 falling over 2%. The Kobeissi Letter estimated that US equity markets could shed $1 trillion in market value, highlighting the scale of investor apprehension.

The firm attributed the market turbulence to DeepSeek's growing popularity, which propelled it to the top spot in the App Store and fueled concerns over its impact on major US tech firms. DeepSeek is a Chinese artificial intelligence company whose free and open-source R1 model has overtaken OpenAI's ChatGPT performance. Venture Capitalist Marc Andreessen described the app as "AI's Sputnik moment."

The widespread crypto market volatility triggered a liquidation spree, with data from CoinGlass showing over $855 billion wiped out. This impacted more than 313,000 traders. Long traders, those betting on price increases, suffered the heaviest losses, accounting for $794 billion. On the other hand, short traders, who wagered on price drops, lost approximately $59 million.

Bitcoin traders faced the most significant losses, with liquidations totaling around $259 million, including $