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Bitcoin drops below $100,000, leading to $855 billion in liquidations following Deepseek AI market disruption.
Bitcoin experienced a sharp drop during Asian trading hours, falling below $100,000 as widespread market volatility affected both the cryptocurrency and stock markets.
According to data from CryptoSlate, BTC decreased by over 6% in the past 24 hours, reaching a low of $97,000 before bouncing back to $99,290 at the time of reporting.
This decline interrupts the momentum that had driven Bitcoin to its record high of $109,000 prior to US President Donald Trump’s inauguration. Analysts indicate that this downturn effectively marks the conclusion of a rally influenced by Trump that characterized the late 2024 market.
Arthur Hayes, co-founder of BitMEX, cautioned about potential further declines. He suggested that Bitcoin could temporarily fall to between $70,000 and $75,000 but remains optimistic about its long-term prospects.
Hayes forecasts that Bitcoin will reach $250,000 before the year concludes, citing possible financial instability and renewed monetary easing as significant drivers.
Meanwhile, other major cryptocurrencies mirrored Bitcoin’s path. Ethereum, BNB, Solana, XRP, Dogecoin, and Cardano each experienced losses of up to 9%, reflecting a general sense of caution in the market.
The stock market declines as well
Additionally, the repercussions of the crypto market decline were also visible in US stock indices, with futures for the Nasdaq 100 dropping over 2%.
The Kobeissi Letter estimated that US equity markets could lose $1 trillion in market capitalization, underscoring the extent of investor concern.
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The firm attributed the market turbulence to the rising popularity of DeepSeek, which has reached the top position in the App Store and raised worries about its impact on major US tech companies.
DeepSeek is a Chinese artificial intelligence firm whose free and open-source R1 model has surpassed the performance of OpenAI’s ChatGPT. Venture Capitalist Marc Andreessen referred to the app as:
“AI’s Sputnik moment.”
Liquidation frenzy
The widespread volatility in the crypto market triggered a liquidation frenzy, with data from CoinGlass indicating that over $855 billion was wiped out. This affected more than 313,000 traders.
According to the data, long traders—those betting on price increases—incurred the largest losses, totaling $794 billion. In contrast, short traders, who speculated on price declines, lost approximately $59 million.
Crypto Market Liquidation (Source: CoinGlass)
Bitcoin traders faced the most significant losses, with liquidations amounting to around $259 million, including $247.5 million from long positions. Ethereum traders followed, reporting $110 million in liquidations, with $104.8 million from long positions.
The largest single liquidation event occurred on HTX, involving a $98 million BTC-USDT long position.
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