Risk assets, including Bitcoin, are declining as a new Chinese AI startup threatens US dominance, leaving analysts speculating about Trump’s next aggressive move.

Bitcoin Drops Below $100,000 Amid Concerns Over Chinese AI

Bitcoin (BTC) is once again under pressure, falling below the $100,000 mark as Chinese AI powerhouse Deepseek shakes global markets. Concerns about US dominance being challenged have led to increased focus on Trump and his potential next move.

According to QCP Capital, traders are closely watching this technological development, which could undermine US dominance in artificial intelligence. In a Telegram post on January 27, an analyst highlighted that Deepseek’s cost-effective and open-source technology poses “a potential threat to US equity markets by disrupting the dominance of American AI through its efficiency and revolutionary open-source approach.”

Strategic Bitcoin Reserve Remains a Concept

To counter these risks, there has been discussion about creating a “national reserve of digital assets.” However, QCP Capital noted that no concrete actions have been taken yet. Without this initiative, analysts do not anticipate a significant breakthrough for Bitcoin.

“Risk reversals remain skewed in favor of calls only from March onwards, indicating the market doesn’t expect much by the end of the quarter,” QCP Capital stated. They added that if Trump takes strong action against China—whether through tariffs, restrictions, or more extreme measures—Bitcoin is likely to remain resilient and continue trading within its familiar range.

Options Market Shows Activity Ahead of FOMC Meeting

Ahead of the upcoming Federal Open Market Committee (FOMC) meeting on January 30, the options market has seen increased activity. Traders are hedging against potential price movements as they brace for market volatility in the coming days.

What’s Next?

For now, analysts at QCP Capital expect Bitcoin to remain stable within its current trading range. However, if Trump responds to the Chinese threat with aggressive measures, such as imposing tariffs or other restrictions, Bitcoin could benefit as a safe haven and maintain its relative stability.

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