The crypto market is experiencing a significant downturn, with a 7% drop in value, largely due to concerns over US AI developments and the upcoming Fed meeting. The Bitcoin market, in particular, has fallen 6.5% to $3.38 trillion, while the Nasdaq100 dropped 2.5% ¹.
The catalyst for this decline is the emergence of DeepSleek's free AI app, which has surpassed ChatGPT as the most downloaded free app on the Apple App Store. This development has raised concerns among US investors, who fear that American tech stocks might be overvalued ².
Bitcoin's price has dropped 6.5% below $98,000, challenging the 50-day moving average. If the market fails to rebound, $93,000 will be a critical support level. Ethereum has also fallen under $3000, briefly touching the 200-day moving average, which may indicate a bearish trend ¹.
Despite these challenges, there are some positive developments in the crypto space. SoSoValue reported $1.76 billion in US spot bitcoin ETF inflows last week, and significant investors have backed bitcoin since Trump's victory. Additionally, the US SEC has repealed SAB 121, which forbade banks from storing cryptocurrency ¹.
