- Bitcoin fell 4% on Monday.
- A larger price correction may be on the horizon.
- AI Arm Race is sending ripples through the market.
Bitcoin’s price took a dip on Monday, briefly falling below $100,000 before recovering. Despite getting back on its feet, the top cryptocurrency is still down 4% over the past 24 hours amid broader investor resurgence.
Analysts pointed to the buzz surrounding Deepseek, a Chinese AI startup, and an AI model that is running at a massive discount to its US rivals, including Sam Altman’s Openai.
Carlos Guzman, an analyst at Crypto Market Maker GSR, said, DL News AI in China has given investors pause in evaluating the sector and the primacy of US companies in the emerging market.
“The market has taken this as a potential negative sign for the valuation of top US tech companies, especially Nvidia, whose valuations reflect the AI premium,” Guzman told The Market. DL News.
BITMEX co-founder Arthur Hayes predicted that Bitcoin could be headed for a massive price correction, at least in the short term.
“I’m calling for a $70,000 to $75,000 correction in Bitcoin, a mini-financial crisis, and a resumption of money printing that will send us to $250,000 by the end of the year,” Hayes said. He said On X on Monday.
Hayes, who is chief investment officer at investment fund Maelstrom, previously predicted that Bitcoin would follow a similar pattern to last year’s price movements. His analysis forecast Bitcoin hitting a new peak in the first quarter of the year, followed by a summer slump and a return to a bull market in the latter half of the year.
Monday’s slump is the latest entry in Bitcoin’s volatile start to the year.
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However, analysts say the asset will double in price this year even if investors experience some short-term pain.
AI-jitsters market
Bitcoin’s decline on Monday followed a massive dive in the US stock market as technology companies saw their stock prices slide.
NVIDIA giant NVIDIA’s stock price has fallen 11.4% in the past 24 hours amid a broader rout in technology stocks.
“It seems clear that we are now in an aggressive AI Arms race,” said Sebastian Pfeiffer, Managing Director of Cloud Cloud Network. DL News.
Despite the negative market reaction to the AI competition emerging from China, crypto market analysts say that the digital asset will bounce back quickly.
According to Kevin Rusher, founder of real-world asset token platform RAAC, market turmoil is unlikely to hurt Crypto for much longer.
“Crypto will probably be one of the biggest beneficiaries of the growth in AI, where that comes from.” DL News.
Osato Avan-Nomayo He is a Davey correspondent based in Nigeria. He covers Defi and Tech. Do you have any advice? Please contact him at osato@dlnews.com.
