Bitcoin on Monday briefly fell below the $100,000 level for the first time in a week, as Chinese startup DeepSeek raised the prospect of cheaper artificial-intelligence models, sparking a tech selloff and weighing on broader investor sentiment.
The largest cryptocurrency by market capitalization, bitcoin traded at as low as $97,740 earlier on Monday, according to Dow Jones Market Data. It recouped some losses to trade at around $101,518 by Monday evening. Bitcoin was still roughly 6.8% away from its record high at $109,225 reached on Jan. 20.
The DeepSeek news has “nothing to do with bitcoin,” noted Jean Rausis, co-founder of the decentralized crypto exchange SMARDEX, in emailed comments.
Rather, bitcoin fell as the DeepSeek-inspired tech selloff weighed on broader investor sentiment. The crypto has been mostly trading in tandem with tech stocks, even though many bitcoin supporters had touted it to be a store of value.
“Whilst crypto is void of near-term narratives, correlations are driving flows and de-risking is flagged,” analysts at crypto market maker Wintermute wrote in a Monday note.
The six-month rolling correlation between bitcoin and the Nasdaq Composite stood at around 0.5 on Monday, the highest since March 2, 2023, according to the Dow Jones Market Data.
Correlation, which is calculated on the scale of -1 to 1, measures the degree to which two assets move in relation to each other. A correlation of 1 indicates a perfect positive correlation, meaning the assets move in lockstep, while -1 suggests a perfect negative correlation, with the assets moving perfectly inversely to each other. A correlation of zero means a move in one asset has no influence either way on the other.
“The strong correlation between bitcoin and equities, especially in the current quarter, remains one of the most reliable market dynamics,” analysts at crypto exchange Bitfinex wrote in a Monday note.
As bitcoin continues its consolidation, “we do not foresee a break higher without confirmation on a strategic bitcoin reserve,” analysts at crypto trading firm QCP Capital wrote in a Monday note.
President Donald Trump repeatedly mentioned his plan to create a strategic bitcoin reserve in the U.S. during his campaign, without mentioning specific details.
Last week, he signed an executive order on cryptocurrencies, which set up a crypto working group and called for the group to evaluate “the potential creation and maintenance of a national digital-asset stockpile, and propose criteria for establishing such a stockpile.”
Still, the evaluation was not enough to sustain bullishness in the market, at least in the near term, noted the QCP analysts. Crypto bulls are hoping to see more concrete actions towards the creation of a strategic bitcoin reserve.
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