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- Global crypto valuations crumbled by $140 billion, fueling fear as on-chain signals hinted at a deeper slide for Bitcoin and Ethereum.
- DeepSeek’s AI surge, powered by Nvidia’s H800 chips, rattled markets worldwide and overshadowed ChatGPT, sparking concerns about Nvidia’s future outlook.
The crypto market experienced a dramatic collapse early Monday, as the global market cap toppled from $3.61 trillion to $3.47 trillion, wiping out nearly $140 billion in under 24 hours, according to CoinGecko. Observers pin that steep drop on multiple factors rattling investor confidence today.
Bitcoin, now hovering around $99K, took a 5.50% hit, while Ethereum dipped to $3,070 and XRP slumped 10% toward $2.81. The Crypto Fear & Greed Index also slid from Greed to a Neutral reading of 55, fueling chatter about possible darker days.
Observers note that market jitters accelerated when on-chain signals hinted at a temporary downtrend. BTC’s 30-day MVRV ratio has entered a precarious zone, raising the odds of deeper losses. Liquidity pressure spiked, and big players appeared braced for a bumpy ride.
DeepSeek AI Shakes the Global Markets
Meanwhile, China’s tech scene delivered a shock when DeepSeek’s AI assistant climbed the US Apple App Store charts, overshadowing ChatGPT. Reuters confirmed on January 27 that DeepSeek is powered by Nvidia’s H800 chips. Forbes predicts Nvidia stock could take a hit.
"Why is Crypto crashing because of DeepSeek?”
A Chinese startup built DeepSeek for $6m.
In comparison, America’s OpenAI (ChatGPT) has raised $17.9.B.
The team built DeepSeek at a FRACTION of the cost and outperforms CHATGPT.
The problem is so many American stocks such as…
— Edgy – The DeFi Edge 🗡️ (@thedefiedge) January 27, 2025
Global equity markets felt a ripple effect, with US stock futures linked to the S&P 500 shedding 1.30%. The Nasdaq 100 dropped 2.3%, and the Dow Jones industrial average dropped 430 points or 1% ahead of major corporate earnings from the Magnificent Seven.
Analysts also point to Federal Reserve policy concerns as traders eye inflation data. Fresh tariffs under President-elect Donald Trump are fanning fear, prompting predictions that the Fed might hold rates steady at 4.25%-4.50% during the January 29 meeting.
An updated CME FedWatch analysis puts a 97.3% probability of rates staying unchanged. Observers believe Jerome Powell’s remarks will guide near-term sentiment since a stronger US dollar and shifting Treasury yields often knock crypto valuations off balance in dramatic ways.
$880 Million Crypto Liquidations in One Day
Coinglass data reports over $880 million in crypto liquidations in a single day, involving nearly 320K traders. The biggest wipeout amounted to $98.46 million on HTX. Around $808 million of long positions and $70 million of shorts evaporated in rapid succession.
Heightened caution has filtered into altcoins like SOL, DOGE, and ADA. The monthly options expiry is another looming threat. Deribit reveals that 78K BTC contracts worth $7.75 billion mature Friday, with a 0.70 put-call ratio and a $98,000 max pain threshold.
Ethereum’s turn arrives with 563K options valued at $1.72 billion, featuring a 0.40 put-call ratio. The max pain stands at $3,350, higher than the current price action. Past monthly expirations have triggered turbulent swings when sentiment skews negative, say longtime market watchers.
