Record Liquidations Hit Crypto
The crypto market has suffered a dramatic blow with close to $1 billion in liquidations recorded in the last 24 hours, according to Coinglass. Bitcoin went below $98,000 and Ethereum slipped to $3,000, triggering across-the-board losses throughout the market. Long positions dominated the liquidation with over $883 million wiped off, while the short contributed $110 million.
During this, more than 344,000 traders were liquidated, and the single largest liquidation order was $98.46 million in a BTC-USDT trade on the HTX exchange. Solana wasn’t an exception, with over $50 million worth of liquidations, XRP with $42 million, while Dogecoin recorded liquidation of over $33 million.
The total capitalization of the crypto market fell 8% and stood at $3.3 trillion. Analysts are blaming this market shakeout on greater concerns about risk assets in the wake of global economic developments.
DeepSeek AI and the Greater Market Impact
The sell-off coincided with news of DeepSeek, an advanced AI system developed in China, which is seen as a potential challenge to U.S. dominance in artificial intelligence. Reports suggest DeepSeek was developed at a fraction of the cost of U.S. projects like OpenAI’s GPT systems. Its open-source nature has heightened concerns about competition in the global AI landscape.
But DeepSeek’s emergence sent ripple effects beyond the crypto space: Tech stocks were also getting pummeled hard, with AI chip manufacturer Nvidia sliding 17%, Advanced Micro Devices shedding 6% and Qualcomm down 2%. Other tech heavyweights Microsoft and Alphabet joined in, adding to the fears about risk assets’ future.
Market analysts have also asked what policy responses could be to the implications of DeepSeek. On X, QCP Capital said, “With DeepSeek challenging U.S. AI dominance, the question lingers, will policymakers step in to stabilize the market or will risk assets fend for themselves?”
A Pivotal Moment for Crypto and AI
Crypto market turbulence and declining tech stocks signal the interdependency of global markets. The emergence of DeepSeek could prove to be the leading change in competitive dynamics, bringing with it wider issues on innovation, regulation, and economic stability. For now, traders and investors face an extremely volatile environment with no respite on the immediate horizon.
