Bitcoin plunged below $100,000 on January 27, down from a peak of $109,114 reached during Donald Trump’s recent inauguration. The drop came as DeepSeek, a new artificial intelligence app from China, disrupted the tech sector.

DeepSeek has caught the attention of investors by matching the capabilities of US-based OpenAI’s technology while using fewer computer chips — a significant cost and efficiency advantage. The app’s rapid rise to the top spot in the App Store has raised concerns about the market position of US tech companies. Market analyst Adam Kobeissi reported that the concerns triggered a 330-point drop in Nasdaq 100 futures.

And the crypto market, which typically moves in tandem with tech stocks, has felt the impact across the board.

BitMex founder Arthur Hayes predicted Bitcoin could fall further to the $70,000 to $75,000 range. However, Hayes also predicted a recovery to $250,000 by the end of the year, citing the Federal Reserve’s expected stimulus measures.

Despite the current market volatility, institutional interest in crypto remains strong

The market now looks ahead to several key economic events this week, including the Federal Reserve’s first policy meeting under the new administration, along with GDP data, PCE figures, and the unemployment report. These indicators are likely to impact both traditional and cryptocurrency markets.