Here’s Why BTC Is Down Below $100K: Market Sell-Off and Predictions

Bitcoin (BTC) experienced a sharp drop below the $100,000 mark, driven by multiple market factors. 

BTC was trading at $99,189.89 at press time, reflecting a 5.46% decline in the last 24 hours and a 7.51% decline over the past seven days. With a 24-hour trading volume of $44.8 billion, Bitcoin’s market capitalization stands at $1.96 trillion.

Chinese AI Developments and Broader Market Sentiment

The drop in Bitcoin’s price has been attributed to bearish market sentiment triggered by the Chinese AI company Deepseek. Reports from Wu Blockchain suggest that Deepseek developed a product capable of competing with OpenAI at a fraction of the cost, raising concerns over tech giants like Nvidia. This led to a broader market downturn, indirectly affecting Bitcoin and other cryptocurrencies.

Bitcoin once fell below $100,000. The main reason was that the Chinese AI company Deepseek used very little cost to create a product that could compete with OpenAI, which triggered bearish sentiment on Nvidia and dragged down the market.

— Wu Blockchain (@WuBlockchain) January 27, 2025

Amid the price drop, large-scale liquidations were observed. Data reveals that 254,486 traders were liquidated in the past 24 hours, with the total liquidation amount reaching $698 million. Long orders accounted for $651 million of the liquidations. The largest single liquidation occurred in the BTC-USDT pair on HTX, valued at $98.46 million.

Arthur Hayes Predicts Further Price Correction

Arthur Hayes, former CEO of BitMEX, shared his outlook on Bitcoin’s future price trajectory, suggesting that the cryptocurrency could face a deeper correction before resuming its upward trend. 

He stated, 

“I am calling for a $70k to $75k correction in $BTC, a mini financial crisis, and a resumption of money printing that will send us to $250k by the end of the year.”

Hayes anticipates that the Federal Reserve may pivot to monetary easing, fueling another Bitcoin rally later in the year. 

Meanwhile, on-chain data indicates that long-term Bitcoin holders have sold over 75,000 BTC in the past week, signaling profit-taking activity as Bitcoin struggles to break past the $106,000 resistance level.

Retail Interest in Bitcoin Rises Despite Price Volatility

Despite the market downturn, retail interest in Bitcoin continues to grow. On-chain data shows an increase in small Bitcoin holders, suggesting renewed optimism among retail investors. 

CryptoQuant data reveals that accumulator addresses are acquiring Bitcoin at record rates, with monthly acquisition levels reaching 495,000 BTC.

Institutional adoption also remains strong, as BTC ETF holdings doubled in 2024, from 650,000 BTC to 1.25 million BTC. Additionally, over 50% of Bitcoin’s supply has remained unmoved for more than two years, underscoring long-term holding behavior among investors.

Crypto Analysts Offer Mixed Perspectives on Market Outlook

While concerns about a broader financial crisis persist, some analysts maintain that Bitcoin’s bull market still has room for growth. CryptoQuant CEO Ki Young Ju stated, 

“We’re in the late stage of the Bitcoin bull market, but I believe there’s still room for growth. I’d say we’re in the early distribution phase, as new retail investors are entering.”

Market data shows that 86% of BTC holders are in profit, and accumulation rates continue to rise, suggesting a sustained interest in the cryptocurrency. While large investors have increased their holdings from 16.2 million BTC to 16.4 million BTC, smaller investors saw a decline in holdings from 1.75 million BTC to 1.69 million BTC, reflecting ongoing market adjustments.

Bitcoin’s near-term price movement will depend on macroeconomic developments and investor sentiment as the market adjusts to evolving conditions.

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