Bitcoin Drops Below $100K, $855B Liquidated in AI Market Shock
Bitcoin experienced a sharp decline during Asian trading hours, plunging below $100,000 as market turbulence rattled both the crypto and stock markets. This downturn has raised concerns among investors, signaling a shift in the market’s momentum.
Bitcoin’s Price Plunge
Over the past 24 hours, Bitcoin fell by more than 6%, reaching as low as $97,000 before slightly recovering to $99,290 at the time of writing. This drop marks a significant reversal from Bitcoin’s all-time high of $109,000, achieved ahead of U.S. President Donald Trump’s inauguration.
Market analysts suggest that this decline indicates the end of the Trump-driven rally that had fueled Bitcoin’s growth in late 2024.
Expert Predictions
Arthur Hayes, co-founder of BitMEX, has warned that Bitcoin’s price could dip further, possibly reaching between $70,000 and $75,000. Despite this short-term bearish outlook, Hayes remains optimistic about Bitcoin’s long-term potential. He predicts that Bitcoin could still reach $250,000 before the end of the year. According to him, financial instability and potential monetary easing could serve as catalysts for another major price surge.
Crypto Market Reaction
Bitcoin’s decline triggered losses across the broader cryptocurrency market. Other major digital assets such as Ethereum, BNB, Solana, XRP, Dogecoin, and Cardano also saw losses of up to 9%. This widespread downturn reflects a cautious sentiment among investors, who are bracing for continued volatility.
Stock Market Impact
The crypto market’s turbulence also impacted traditional financial markets. U.S. stock indices faced significant declines, with Nasdaq 100 futures dropping over 2%.
The Kobeissi Letter estimated that the U.S. equity markets could lose up to $1 trillion in value due to the ongoing market uncertainty. A major factor contributing to this decline is the rise of DeepSeek, a Chinese artificial intelligence company. Its open-source R1 model has outperformed OpenAI’s ChatGPT, raising concerns about its impact on U.S. tech giants. Venture capitalist Marc Andreessen referred to DeepSeek’s rapid rise as “AI’s Sputnik moment.”
Liquidation Frenzy
The crypto market crash led to massive liquidations, wiping out over $855 billion, according to data from CoinGlass. More than 313,000 traders were affected, with long traders—who had bet on price increases—facing the most significant losses. These traders lost approximately $794 billion, while short traders lost around $59 million.
Bitcoin traders saw the biggest hit, with total liquidations reaching $259 million, including $247.5 million from long positions. Ethereum traders also faced heavy losses, with liquidations totaling $110 million, of which $104.8 million came from long positions.
The largest single liquidation event occurred on HTX, involving a massive $98 million BTC-USDT long position.
Conclusion
Bitcoin’s sharp decline below $100,000 has triggered widespread market turbulence, impacting both the crypto and traditional financial sectors. While analysts warn of potential further dips, long-term projections remain optimistic, with predictions of a significant rebound by year-end. Investors now closely watch market trends, awaiting the next move in this volatile landscape.
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