Bitcoin's Plunge: $98.5K and Counting

Bitcoin Price Plummets Below $98.5K: Analysis and Reactions

Bitcoin's price has taken a significant tumble, dropping below the $98,500 mark, a level not seen since early January. This correction has sparked analysis and reactions from industry experts and investors alike.

Former BitMEX CEO Arthur Hayes has predicted that the price of Bitcoin could collapse to the $70,000 level due to a "mini financial crisis" in the U.S. However, he remains bullish on the long-term prospects of the leading cryptocurrency, forecasting a potential surge to the $250,000 level by the end of the year.

Earlier today, Bitcoin crashed to an intraday low of $98,440, nosediving by nearly 7% over the past 24 hours. This coincided with a severe rout in major chip stocks during pre-market trading, with E-mini Nasdaq-100 Futures down 2.62% according to the latest data.

The market turmoil came after the Chinese artificial intelligence (AI) startup DeepSeek released a new large language model called DeepSeek-R1, which outperformed some popular models, including OpenAI's o1, on key benchmarks. This is despite the startup struggling to obtain advanced chips due to export controls. Notably, the startup spent just $6 million to train the model compared to the billions of dollars required by OpenAI.

The success of DeepSeek, which has emerged as the most popular app on the App Store, might put a dent in demand for chips and data centers, considering the startup spent mere peanuts on raw computing power while still outperforming leading US tech giants.

As Bitcoin faces increased selling pressure from long-term holders, it is testing key support levels. The surge in Bitcoin's Liveliness indicates significant sell-off activities, with a notable rise in Coin Days Destroyed, suggesting a shift in market dynamics.

Reclaiming the $105,000 threshold could reinstate bullish momentum toward $109,699, noted a market analyst from COINOTAG, emphasizing the stakes involved. Bitcoin is testing critical support at $100,000 as long-term holders sell, with potential recovery depending on reclaiming $105,0