The cryptocurrency market took a sharp tumble today, shedding over $212 billion in value in just 24 hours. This 5.4% drop has dragged the global market cap down to $3.42 trillion, sparking concern among traders and investors. Surprisingly, this downturn isn’t entirely due to crypto-specific issues—it’s tied to events in the broader U.S. stock market.
What Triggered the Crash?
The unexpected success of a Chinese AI app, DeepSeek, has rattled the market. Competing directly with ChatGPT, DeepSeek has climbed to the top spot on the Apple App Store. What’s even more surprising? DeepSeek was developed with a modest $10 million budget, compared to ChatGPT’s massive $157 billion valuation.
This has left U.S. investors worried that many American tech stocks might be significantly overvalued. The resulting sell-off in the U.S. stock market spilled over into the crypto space, amplifying the losses.
Liquidations Add Fuel to the Fire
The crypto crash has led to widespread liquidations, with $613 million wiped out in the past 24 hours. Long traders took the biggest hit, losing $569 million. The largest single liquidation, worth $98.46 million, occurred on the HTX exchange, highlighting the scale of the sell-off.
Bitcoin Struggles to Hold $100K
Bitcoin, the world’s largest cryptocurrency, has dropped more than 5% and is currently hovering around $99,969. It briefly dipped below $100,000, a key psychological support level.
If Bitcoin can recover and climb above $105,000, it might regain some bullish momentum. However, losing the $100,000 support could lead to deeper losses in the short term.
Altcoins See Sharp Declines
Altcoins are also feeling the heat, with Ethereum (ETH), XRP, and Solana (SOL) all down by 8-10%. Meme coins haven’t been spared either—DOGE and SHIB dropped by 8% and 7%, while PEPE and TRUMP tokens saw steeper declines of nearly 13%.
What’s Next?
This crash highlights the interconnectedness of global markets. While crypto remains highly volatile, today’s events underscore how external factors, like concerns about tech valuations, can have a cascading impact. For now, all eyes are on Bitcoin’s performance at the $100,000 level as traders watch for signs of recovery.