"Bitcoin Drops Below $100K as AI Boom and Fed Policy Shake Crypto Market"

Bitcoin's price has dipped below $100,000, marking an 11-day low, as the cryptocurrency market faces significant volatility. This decline is closely linked to a broader sell-off in the technology sector, with the recent launch of a free, open-source AI model by Chinese startup DeepSeek intensifying competition in the tech industry and leading to substantial losses in U.S. tech stocks. This development has had a ripple effect on cryptocurrencies, which often move in tandem with tech equities.

Bitcoin, the leading cryptocurrency, fell below $100,000, while other major cryptocurrencies, including Ethereum, XRP, Solana, and Dogecoin, also faced significant declines. Analysts suggest that the high correlation between Bitcoin and tech stocks, particularly the Nasdaq 100, has fueled this downturn. Additionally, market sentiment has been influenced by expectations regarding U.S. Federal Reserve policies. Investors are anticipating that the Federal Reserve will maintain higher interest rates for an extended period, which has historically led to a reduction in risk appetite across various asset classes, including cryptocurrencies.

The substantial loss in the cryptocurrency market is primarily driven by a combination of intensified competition in the tech sector due to new AI developments and shifting expectations of U.S. monetary policy. As the market faces these challenges, investors are eagerly awaiting the conclusion of the first of eight FOMC (Federal Open Market Committee) meetings this year, which could have a significant impact on speculative assets, including cryptocurrencies.

While the cryptocurrency market is volatile, it has demonstrated resilience after substantial downturns in the past. For example, the Mt.Gox crash of 2014 triggered a sell-off that pulled the BTC price down by 36%, and a similar black swan event occurred when Terra/Luna collapsed in 2022, bringing BTC down 50%. Despite these setbacks, cryptocurrencies have recovered each time, albeit with varying timelines. After the 2018 crash, it took Bitcoin nearly three years to reach new all-time highs, while during the 2022 market collapse, Bitcoin rebounded in 2023 thanks to renewed interest in decentralized finance and institutional adoption.

While short-term recovery might be challenging, the market's long