Bitcoin's price dropped 6.5% on Jan. 27, falling to $97,906 as a result of a broader market decline linked to a new AI model release from China-based DeepSeek.
Bitcoin's price dropped 6.5% on Jan. 27, falling to $97,906 as a result of a broader market decline linked to a new AI model release from China-based DeepSeek. However, Bitcoin has since regained some ground, bouncing back to over $100,000, trading at $105,400. This volatility has raised concerns about the coin's potential to dip below $75,000 in the near future.
According to Sean Dawson, head of research at Derive, the likelihood of Bitcoin falling to $75,000 by March has increased slightly, now standing at 9.2%, up from 7.2% just a day earlier. Dawson attributes this uptick to Bitcoin's increased implied volatility, which has surged from 52% to 76%, signaling greater demand for put options designed to protect against a price drop. This shift reflects a more bearish sentiment in the market as traders adjust to growing uncertainty.
Bitcoin's movements have also been tied more closely to broader market trends. Analysts from Bitfinex pointed out that Bitcoin's price is increasingly linked to stock market shifts and global risk sentiment, indicating that Bitcoin is no longer operating in isolation but as part of the wider financial ecosystem. In fact, Bitcoin's price fluctuations are often a reflection of larger macroeconomic factors rather than just the performance of the cryptocurrency itself.
The last time Bitcoin was near the $75,000 range was Nov. 8, 2024, just after Donald Trump's victory in the U.S. presidential election. This marked the start of a rally that saw Bitcoin soar to $100,000 by Dec. 5. Given the current conditions, Bitcoin’s future price remains uncertain, and the market is watching closely to see if it will continue to rise or experience further declines.
Meanwhile, Arthur Hayes, co-founder of BitMEX, has predicted that Bitcoin could fall into the $70,000 to $75,000 range. Hayes suggests that such a drop could trigger a “mini financial crisis,” which may prompt a return to money printing, potentially pushing Bitcoin's price to $250,000 by the end of 2025.
As Bitcoin continues to experience significant price fluctuations, the market remains divided on whether it will stabilize or drop further. The growing correlation between Bitcoin’s price and broader economic trends suggests that its value could be heavily influenced by external factors in the coming months. The outlook for Bitcoin in early 2025 remains uncertain, with experts offering varying predictions about its short-term and long-term future.
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