BTC Price Dips Below $99K Ahead of Significant U.S. FOMC Meeting
Bitcoin (BTC) fell to less than $99,000 on Monday as traders grabbed profits ahead of this year’s first U.S. FOMC meeting, which is set for later this week. Additionally, confidence in the U.S. tech sector was affected by China-based AI giant DeepSeek. The two-day FOMC meeting on January 28-29 often affects bitcoin prices as investors either favor or shy away from risky assets. However, traders do not expect any signs of a rate cut for now.
U.S. economic data shows that there may be less need for a federal interest rate cut in the near term. Concerns over trade wars and tariffs linger, but a bullish sentiment remains strong as MicroStrategy and Trump’s World Liberty Financial continue purchasing crypto.
Ben El-Baz, managing director of HashKey Global
China’s DeepSeek AI Model Sparks Concerns Over Bitcoin Stability
As China-based DeepSeek upends the AI market, worries about Bitcoin’s performance are connected to possible overvaluation in US tech firms. DeepSeek’s most recent AI model, which was developed using open-source technologies on a $6 million budget and little GPU usage, performs better than OpenAI’s systems, which need trillions of dollars to support. This striking disparity calls into question the viability of high valuations for US tech companies and affects market sentiment by challenging the notion that extensive AI advancement requires enormous resources.
Bitcoin traders are becoming more cautious as worries about wider market effects increase. Given the ongoing market instability, many are using $95,000 strike options as a hedge, indicating expectations of additional downside in the near future.
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