Bitcoin Plunges Below $100K Amid AI Shock and Massive Liquidations

Bitcoin Plunges Below $100K as Market Faces AI Shock and Liquidations

Bitcoin, the world's leading cryptocurrency, has experienced a significant decline, falling below the $100,000 mark. This drop comes amidst a broader market downturn triggered by the rapid rise of DeepSeek, a Chinese AI application that has sparked concerns about U.S. tech valuations. The crypto market has witnessed over $212 billion wiped from its global market capitalization, with Bitcoin leading the decline.

The psychological support level of $100,000 is now being tested, as the price briefly touched $99,902 during the day's trading. This decline marks a more than 5% decrease from its recent high of nearly $110,000. Major altcoins, including Ethereum, XRP, and Solana, have also seen drops of 8-10% in response to the market turmoil.

The market decline has triggered substantial liquidations across cryptocurrency exchanges. Within 24 hours, $613 million worth of positions were liquidated, with long traders bearing the brunt of the losses at $569 million. The largest single liquidation event occurred on the HTX exchange, involving a position worth $98.46 million.

The emergence of DeepSeek, an AI model developed in China, has rapidly shifted market dynamics, contributing to significant volatility in the cryptocurrency sector. This development has raised concerns about an intensifying global AI arms race, especially as companies compete for dominance in this increasingly important market.

The market reaction to DeepSeek's rise has been swift and severe, with over $864 million in liquidations occurring within 24 hours. This liquidation spree has primarily affected Bitcoin (BTC) traders, with around $250 million in long positions being liquidated. The selling pressure has been exacerbated by traders attempting to mitigate risk amid fears of further market declines.

The influence of AI advancements extends beyond cryptocurrency into broader tech stocks, with companies like Nvidia experiencing noticeable declines. As per recent reports, Nvidia's market valuation decreased by 3.12% by the end of January 24, reaffirming how intertwined technology stocks and the crypto market have become in this climate of heightened competition.

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