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The cryptocurrency market is experiencing a significant drop, losing over $212 billion in value within the past 24 hours. This 5.4% decline has brought the global market cap down to $3.42 trillion. Interestingly, this crash isn’t entirely due to crypto-specific issues but is closely linked to events in the U.S. stock market.
Chinese AI App Shocked the US Market
A Chinese AI app called DeepSeek has unexpectedly shaken the market. Competing with ChatGPT, DeepSeek recently became the no 1 free app on the Apple App Store. What’s surprising is that DeepSeek was developed for under $10 million, compared to ChatGPT’s massive $157 billion valuation.
This sudden success has made U.S. investors nervous, as they fear that many American tech stocks might be overvalued. This concern triggered heavy selling in the U.S. stock market, which then spilled over into the crypto market, causing widespread losses.
Liquidations Add to the Sell-Off
The crypto market drop has led to large-scale liquidations. In the last 24 hours, $613 million worth of positions were liquidated, with long traders suffering losses of $569 million. The biggest single liquidation happened on the HTX exchange, worth $98.46 million.
Bitcoin’s Price Struggle
Bitcoin, the largest cryptocurrency, has dropped over 5% and is now trading at around $99,969. It briefly fell to $99,902 in the past day. However, to prevent further price drops, the $100,000 mark serves as a critical support level. Losing this level could result in even more substantial losses.
On the other hand, if Bitcoin recovers and rises above $105,000, it could regain some bullish momentum.
Altcoins Follow the Decline
Altcoins are also facing sharp losses. Ethereum (ETH), XRP, and Solana (SOL) have dropped by 8-10%. However, meme coins like DOGE and SHIB have fallen by 8% and 7%, respectively. PEPE and TRUMP tokens saw even larger losses of nearly 13%.
