Bitcoin churned at US$101,800 as of 10.21am today in Singapore, holding most of a 3% drop from the prior session.
Tokens such as Ether and Solana shouldered bigger hits in the slipstream of a plunge in the Nasdaq 100 Index of US tech stocks.
The sudden success of DeepSeek’s open-source platform signals growing AI competition from China, exacerbating worries over the sector’s rich valuations in the US.
The risk for crypto is that equity market angst erodes wider speculative appetite, countering the tailwind from president Donald Trump’s executive order in favour of supportive digital-asset regulations.
Bitcoin’s tight correlation with US tech stocks underlines the vulnerability.
A 30-day correlation coefficient for the cryptocurrency and the Nasdaq 100 is at about 0.67, data compiled by Bloomberg show.
A reading of 1 indicates assets are moving in lockstep, while minus 1 signals an inverse tie.
For ByteTree Asset Management CIO Charlie Morris, it’s “getting harder to distinguish between bitcoin and big tech” given the two are moving in tandem.
Despite the executive order and a retreat in a dollar gauge this year, “bitcoin can’t make a new high,” he wrote in a note.
The token reached a record of US$109,241 ahead of Trump’s inauguration on Jan 20 but subsequently slipped back.
His presidential action on Thursday failed to trigger much of a market reaction.
Bitcoin jumped 465% over 2023 and 2024, leading some to ask how much longer the good times can last.
Trump’s pro-crypto stance remains a powerful pillar of support, according to Jonathan Yark, senior quant trader at market maker Acheron Trading.
“If the Trump administration moves forward with an aggressive pro-crypto policy, bitcoin and digital assets are in line for favourable repricing even with traditional market demand waning,” he said.
Some corners the digital-asset market are already mired in a deepening pullback.
A gauge tracking the bottom half the largest 100 digital assets is down more than 10% since the turn of the year.
For bitcoin, a range from US$90,000 to US$110,000 will likely “continue to hold for some time as the market consolidates,” said Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for crypto derivatives.