Bitcoin Crashes Below $100K—Temporary Dip or Start of a Bearish Trend?
Bitcoin (BTC), the leading cryptocurrency, plummeted below the critical $100,000 threshold earlier this week, triggering a market-wide downturn. As of the latest data, BTC trades at **$98,736.09, marking a 5.60% decline within 24 hours. Its market cap stands at $1.95 trillion**, while trading volume surged **154.93%** to **$54.46 billion**. This abrupt drop has fueled debates around the causes of the Bitcoin crash and whether the crypto market downturn will persist.
Why Is Bitcoin Falling? 5 Major Factors Explained
1. Profit-Taking Before FOMC Meeting
Traders are cashing out gains ahead of the Federal Open Market Committee (FOMC) meeting on January 29–30. With no expected rate cuts, investor caution has spilled into crypto, amplifying Bitcoin’s volatility. This aligns with historical trends where macroeconomic uncertainty triggers Bitcoin price fluctuations.
👉 Bitcoin halving explained: How it impacts price cycles
2. China’s DeepSeek AI Shakes Tech Sector Sentiment
China’s AI innovator DeepSeek has disrupted U.S. tech dominance, causing ripple effects in Bitcoin’s valuation. As BTC increasingly correlates with tech stocks, this development underscores the interconnectedness of global markets and crypto.
3. Mass Liquidations Wipe Out Traders
- 317,807 traders liquidated in 24 hours
- $872.87 million total losses
- Largest single liquidation: $98.46 million (BTC-USDT on HTX)
Long positions bore the brunt ($807.90 million), revealing misjudged optimism about Bitcoin’s short-term trajectory.
4. Arthur Hayes Predicts Short-Term Drop, Long-Term Rally
Ex-BitMEX CEO Arthur Hayes forecasts a "mini crisis" dip to $70K–$75K before a potential surge to $250K later in 2025. His analysis hinges on macroeconomic recovery and Bitcoin halving effects.
5. Mixed Analyst Outlooks
While some view this as a buying opportunity, others warn of extended bearish pressure. Key indicators to watch:
- FOMC decisions
- Institutional inflows
- Bitcoin ETF performance
Bitcoin Price Prediction for 2025: Recovery or Further Decline?
Despite the crash, long-term optimism persists. Analysts note:
- Adoption growth: Institutional interest remains strong.
- Halving effect: Historical data suggests post-halving rallies.
- Macro trends: Fed policy shifts could reignite bullish momentum.
👉 Top 3 crypto strategies to hedge against volatility
FAQ: Bitcoin Crash Explained
Q1: Is the Bitcoin crash linked to the stock market?
A: Partially. BTC increasingly mirrors tech stock trends, and global economic uncertainty affects both.
Q2: Should I sell my Bitcoin now?
A: Depends on your strategy. Short-term traders may cut losses, while long-term holders often ride out volatility.
Q3: How low could Bitcoin go in 2025?
A: Predictions range from $70K** (Hayes) to **$250K (bull case), hinging on macroeconomic recovery.
Q4: What’s the impact of Bitcoin halving?
A: Reduced supply historically drives prices up, but effects may take months post-event.
Q5: Are altcoins affected by Bitcoin’s drop?
A: Yes. Most altcoins follow BTC’s trend due to market correlation.
Key Takeaways
- Bitcoin’s drop reflects profit-taking, macro caution, and tech sector jitters.
- Liquidations worsened the downturn, catching leveraged traders off guard.
- Long-term outlook remains bullish, but short-term volatility is likely.
Monitor FOMC updates and BTC halving dynamics for clearer signals.
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