Bitcoin falls below $98,000 as cryptocurrency market hit by tech stock declines - UPDATED
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Cryptocurrencies took a hit to start the final week of January, with Bitcoin falling 5% to $98,432.54, following a tech-driven sell-off sparked by DeepSeek.
At one point, Bitcoin dropped as low as $97,750, News.Az reports, citing CNBC News.The broader market of cryptocurrencies, as measured by the CoinDesk 20 index, dropped nearly 10%.
Nasdaq futures were down about 4% in early trading.
Shares of Coinbase and MicroStrategy fell 6% and 5%, respectively, in premarket trading. Bitcoin miners that power AI ventures suffered deeper cuts. Core Scientific slid 18.5%, while Terawulf lost 14% and Iren, formerly known as Iris Energy, fell 10%.
Crypto was under pressure from a rout in tech stocks. Chinese startup DeepSeek said it may have created a competitive artificial intelligence model for a fraction of the cost, sparking concerns about U.S. dominance in AI and big tech’s spending on AI models and data centers.
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Bitcoin (BTC) fell below $99,000 early Monday as traders took profits in anticipation of the first U.S. Federal Open Market Committee (FOMC) meeting of the year, set for later this week.
The drop also came amid growing concerns about the impact of China-based AI company DeepSeek on the U.S. tech sector's sentiment, News.Az reports, citing CoinDesk.
Traders expect no indications of a rate cut at the two-day FOMC meeting scheduled for Jan. 28 to Jan. 29, which has typically impacted bitcoin prices as investors either prefer or move away from risk assets.
BTC dropped nearly 6% from a Sunday high of over $105,000, with a steep drop coming as Asian markets opened Monday. This came despite a major catalyst on Friday, when U.S. President Donald Trump ordered the creating of a crypto policy group to advise and drive the country's industry within six months.
Crypto market capitalization fell 8%, while the broad-based CoinDesk 20 (CD20) fell more than 8.14%.
The drop tracked a fall in U.S. stock indices — whose movements bitcoin tends to mirror — with futures of the S&P 500 and Nasdaq 100 down as much as 2.15% on Monday ahead of the market open.
Much of the concern draws from a possible overvaluation in U.S. tech companies as DeepSeek’s latest AI model is significantly cheaper to produce and was built using open-source technology that is easy to access.
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Bitcoin experienced a decline as traders cashed in on profits just days after President Donald Trump recognized the digital-assets industry as a key driver of U.S. innovation in an executive order.
The original cryptocurrency slid as much as 3.70% to below $101,000 on Monday while smaller tokens like Solana and Cardano, which have rallied since Trump’s election victory, fell than more 5%, News.Az reports, citing Bloomberg.
The slump comes after the President on Friday ordered the creation of a working group to advise the White House on crypto policy in a long-awaited executive action. The group is tasked with proposing a regulatory framework for digital assets in the US within six months, while evaluating the creation of a crypto stockpile. The order stopped short of confirming that the US would establish a Bitcoin reserve — something Trump had vowed to do on the campaign trail.
“Even though the market got 90% of what it wanted with the executive orders, it evidently was mostly priced in,” said Sean McNulty, head of APAC derivatives at FalconX. Anything short of a Bitcoin reserve “that immediately started buying BTC was going to disappoint,” he added.
The digital-asset market took the order largely in its stride on Jan. 24, posting modest gains in its aftermath. Bitcoin is up more than 50% since Trump’s election victory in early November. Trump used to be a crypto skeptic but had a change of heart on during campaigning, in part as the industry ramped up its involvement in the election through sizable political donations. He has pledged to make the US the world’s crypto capital and in December named venture capitalist David Sacks as artificial intelligence and crypto czar.
The Republican’s embrace of the sector was on full display in the days leading up to his inauguration on Jan. 20, when he and his wife Melania launched memecoins — highly volatile tokens with questionable intrinsic value.
“After a string of bullish news — like pro-crypto regulatory appointments, new ETF product filings, and executive orders — the market seems to be catching its breath,” said Justin d’Anethan, head of sales at Liquifi, a token launch advisory firm.
Asian stocks rose in early trade on Monday even as trade war fears resurfaced after Trump ordered punitive sanctions on Colombia for rejecting US deportation flights over human rights issues. US stock index futures tumbled amid concerns that an artificial intelligence model from China’s DeepSeek may disrupt the technology world — fears that have “cascaded across futures and into digital assets,” according to Jonathan Yark, senior quant trader at market maker Acheron Trading.
Bitcoin was trading at $101,507 as of 11:20 a.m. in Singapore on Monday.
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