Bitcoin and various altcoins experienced a sharp sell-off as traders moved to reduce their exposure following the successful launch of China’s DeepSeek AI application. On January 27, Bitcoin briefly fell below $98,000, sparking concerns about increasing competition in the AI market. The cryptocurrency market saw liquidations reaching $864 million within 24 hours, even though there is no direct connection to cryptocurrencies.
Arthur Hayes, co-founder of BitMEX, warned of a potential correction in Bitcoin but was optimistic about a recovery, foreseeing Bitcoin possibly hitting $250,000 by year-end as monetary policies evolve. Market players are expected to monitor outcomes from the Federal Open Market Committee meeting on January 28 and 29, where a pause on rate cuts is anticipated.
Meanwhile, MicroStrategy purchased 10,107 Bitcoins between January 21 to 26, continuing its lengthy buying campaign as the largest corporate holder of the cryptocurrency, paying an average of $105,596 per Bitcoin.
In broader market analysis, the S&P 500 Index experienced a significant drop, suggesting a rejection of its rally beyond 6,100. On the other hand, the US Dollar Index slid below its 50-day moving average, indicating bearish attempts to regain control.
For Bitcoin, bulls are attempting to defend the 50-day SMA at $99,382 to steer price back to $109,588. If unsuccessful, it could signal a trip down to the $90,000 support zone. Ether showed signs of a potential decline if it doesn’t push above its 50-day SMA soon, while XRP showed behaviors of profit-booking with future support likely at $2.20.
Solana faced profit-taking pressures near $260, dropping, and potentially heading toward $180 if bears exert greater control. BNB attempted to bounce back from $635 support but could face resistance at moving averages. Dogecoin found support at $0.30, while Cardano seemed poised to test lower supports near $0.80. Chainlink also showed indications of potential range-bound movement, aiming for the $31 level if it maintains above moving averages.
The article highlights that investments and trading involve risks, urging readers to conduct their own research before making decisions.
