The crypto market suffered a sharp decline in the past 24 hours, losing around $1 billion in value as Bitcoin slipped below $100,000.
According to CoinMarketCap, Bitcoin’s price dropped 5% from its high of $105,000 and bottomed out at $97,795 before recovering slightly to $101,667 as of press time.
The altcoin market mirrored Bitcoin’s decline, with Ethereum losing over 5% to hit an intraday low of $3,024.
Additional selling pressure came from the Ethereum Foundation (EF), which sold 100 ETH for $307,893 as part of ongoing asset management. Blockchain analytics firm SpotOnChain reported that the Foundation has sold a total of 300 ETH this month, generating approximately $981,200.
Other leading altcoins, including XRP, Dogecoin, Solana, Cardano, and Avalanche, also recorded significant double-digit losses during the same period, painting a bleak picture for the broader market.
These rapid price fluctuations triggered significant losses for traders speculating on the price of these digital assets.
According to data from CoinGlass, approximately 330,000 traders faced liquidations, with $847 million stemming from long positions. These traders had anticipated further price increases.
Meanwhile, $158.44 million came from short positions betting against the market.
Why Did Bitcoin Price Fall?
The sell-off appears to stem from concerns over inflated valuations in the US tech sector.
Over the past week, Chinese AI company DeepSeek introduced an innovative and cost-effective AI model that has disrupted industry norms. Built with a modest $6 million budget, DeepSeek’s model rivals industry leaders like OpenAI, which has relied on significant funding and extensive computational resources to maintain its edge.
This development has raised questions about the sustainability of high valuations in the U.S. tech sector. Nvidia, a major chipmaker, saw its stock plummet by 17% during this period, erasing nearly $600 billion from its market value.
So, the upheaval in tech markets has rippled into the crypto space, with analysts linking Bitcoin’s decline to broader financial instability. Some experts, including crypto veteran Ash Crypto, believe the sell-off reflects market-wide reactions to changing dynamics in the tech industry.
Despite the short-term uncertainty, some analysts remain optimistic about crypto’s long-term prospects. LondonCryptoClub suggested the market dip could mark a temporary low in an ongoing bull trend. They argued that innovations in AI could ultimately drive disinflation and lower interest rates, creating favorable conditions for Bitcoin and other digital assets.
They added:
“From a macro point of view, cheaper AI adds to our big picture disinflationary view of the world which will continue to see rates move lower and necessitate more debt monetisation which is positive Bitcoin (and will also feed back into broader risk) Crypto is also the currency of AI and we might be set to accelerate the move towards AGI.”
