Bitcoin’s value dropped below $100,000 on Monday, hitting an 11-day low as broader tech market selloffs weighed heavily on cryptocurrencies. The world’s largest cryptocurrency fell to $98,852.17 at 11:56 GMT, marking a 6% intraday drop after briefly touching its lowest level since January 16.

Tech Stocks Dive as Chinese AI Firm Sparks Fears
The decline in Bitcoin mirrored sharp losses across technology stocks, which faced heavy selling pressure. The selloff was triggered by fears over Chinese AI startup DeepSeek, whose rise threatens Western tech companies' dominance in the AI sector. Traders referred to this development as a potential “AI Sputnik moment,” reminiscent of the Soviet Union's space race leadership in the 1950s.

Market Sentiment Weighs on Bitcoin and Digital Assets
Analysts linked Bitcoin's selloff to heightened risk-averse sentiment stemming from tech’s weakness. According to Simon Peters, an analyst at eToro, “Bitcoin's losses are seemingly driven by the market reaction to DeepSeek’s potential impact.” Additionally, Geoffrey Kendrick, head of digital asset research at Standard Chartered, noted that falling Nasdaq futures further pressured crypto assets.

Policy and Regulatory Uncertainty Add to Volatility
Disappointment over cryptocurrency's exclusion from former U.S. President Donald Trump’s day-one policy announcements also amplified the selloff. Trump’s executive order last week established a working group to explore new cryptocurrency regulations and a crypto stockpile, but it fell short of market expectations. The Securities and Exchange Commission (SEC) added to the unease by rejecting accounting guidance that many in the industry saw as critical for driving adoption.

Interest Rate Outlook Adds Pressure
Riskier assets, including cryptocurrencies, also faced headwinds from expectations of higher-for-longer U.S. interest rates. “Prolonged high rates are making investors more cautious about volatile assets,” said Thomas Puech, CEO of digital asset hedge fund Indigo.

With U.S. Federal Reserve policymakers meeting this week, markets are bracing for any changes in interest rate direction, though rates are widely expected to remain unchanged.

Conclusion
The sharp pullback in Bitcoin and tech stocks underscores the sensitivity of digital assets to broader market trends, particularly in technology and policy shifts. As global markets react to emerging tech developments and economic signals, traders will likely remain cautious in the near term.

Source: Reuters.com