In recent trading, Bitcoin experienced a notable drop of nearly 6% over the past 24 hours, briefly falling below $98,000. This downturn came despite a significant announcement on Friday from former President Donald Trump regarding the establishment of a crypto policy group aimed at shaping the United States' cryptocurrency landscape within six months.
Market experts warn of potential further declines. Arthur Hayes, co-founder of BitMEX, anticipates a challenging period for Bitcoin. He foresees a correction to between $70,000 and $75,000, suggesting a "mini financial crisis" could be on the horizon. Despite this short-term forecast, Hayes remains optimistic about Bitcoin's long-term potential.
He envisions a surge to $250,000 by year-end, propelled by renewed monetary stimulus. Hayes commented, “I am calling for a $70k to $75k correction in $BTC, a mini financial crisis, and a resumption of money printing that will send us to $250k by the end of the year.”
The recent drop in Bitcoin's value has been linked to a broader market sell-off spurred by the rise of DeepSeek, a China-based artificial intelligence app.
This app has impressed markets by competing effectively with OpenAI’s models while requiring fewer resources. Such developments have sparked concern among investors, triggering a "risk-off" approach. Bitcoin, often correlated with US growth stocks, has benefited from the AI surge since 2022 but now faces challenges due to potential market shifts caused by innovations like DeepSeek.
According to market analyst Adam Kobeissi, the latest crypto market sell-off can be attributed to uncertainty introduced by DeepSeek's disruptive capabilities. Additionally, crypto analyst Ali Martinez highlights a failed head-and-shoulders pattern in Bitcoin's recent price action, suggesting a bullish outlook. In his analysis, Martinez points to a potential upside target of $122,000, citing invalidation of the previous bearish formation. He also compares the current market trajectory to the 2015-2018 cycle, noting that Bitcoin has historically exhibited parabolic growth at this stage.
Overall, while market sentiment remains cautious, analyses suggest potential for substantial upward momentum should certain conditions align favorably.