Bitcoin Plunges Below $100K Amid AI App Surge

Bitcoin, Ethereum, and XRP Prices: Market Sentiment Shifts Amidst Volatility

Bitcoin (BTC) experienced a sudden drop on January 27, falling below the crucial $100,000 level after a 5% decline. The flagship cryptocurrency is currently trading around $99,100, with bulls showing signs of exhaustion. The unexpected drop was attributed to a market selloff sparked by the growing popularity of the China-based artificial intelligence app DeepSeek.

Bitcoin's price fluctuations highlight the ongoing battle between market optimism and uncertainty as the month of January comes to a close. The cryptocurrency's recent selloff has led to over $128 million in long position liquidations across the crypto derivatives markets, with total liquidations reaching $371 million. Despite the bearish sentiment, open interest in the Bitcoin futures market remains high, crossing $64 billion.

The upcoming week is crucial for the crypto market, with several key events on the horizon. The Federal Reserve is set to decide on interest rates on Wednesday, with most analysts expecting the Fed to leave rates unchanged. However, Fed Chair Jerome Powell's speech after the meeting could impact market sentiment, as interest rates and Bitcoin have become increasingly intertwined. On Thursday, the primary GDP data for the US economy will be released, with the US economy expected to grow by 2.7% on a quarterly basis. Lastly, Friday will see the release of the core personal consumption expenditure index.

Bitcoin's latest drop contrasts with market expectations following Donald Trump's inauguration. While the president signed an executive order to boost crypto, the inauguration speech failed to mention crypto, leaving many investors surprised and prompting them to sell. The TRUMP and MELANIA meme coins added fuel to the fire, driving the markets up as investor enthusiasm surged, only to crash spectacularly. These macroeconomic factors could substantially impact Bitcoin's price in the coming days.

Bitcoin could face a significant test that could see the price drop as low as $75,000 if it triggers a double-top bearish reversal pattern. BTC is down nearly 4% during the ongoing session, its most substantial decline since the beginning of January. If BTC fails to break and dips below the double-top neckline, a change in trend will be confirmed, potentially driving BTC below $