Bitcoin Dives To Under $100K Ahead Of Fed Meeting As DeepSeek AI Fuels Tech Sector Panic: Retail Sentiment Sours

Bitcoin’s price dropped below the $100,000 mark Monday as market participants grappled with the implications of the upcoming Federal Open Market Committee (FOMC) meeting – the first one this year – and the impact of DeepSeek on the U.S. tech sector.

BTC had dropped nearly 6% on Monday morning from a Sunday high of over $105,000.

Traders opted to lock in profits, expecting the Federal Reserve to maintain its current interest rate policy during the two-day meeting scheduled for January 28-29. 

CME’s FedWatch tool indicated a 97.3% probability of no rate changes.

Broader cryptocurrency and equity markets also tumbled, weighed down by fears over China's DeepSeek, an AI innovator.

DeepSeek became the number one downloaded application on Apple Inc.’s (AAPL) App Store over the weekend.

The company leveraged open-source technology, raising questions about the sustainability of U.S. tech giants’ capital-intensive AI projects, specifically the recently announced U.S.-backed Stargate initiative—a $500 billion project designed to support domestic AI development spearheaded by SoftBank and Oracle.

Meanwhile, the cryptocurrency market’s total capitalization fell by nearly 8% over the weekend, despite Friday’s announcement by President Donald Trump to establish a crypto policy group aimed at advancing the industry within six months.

Retail sentiment surrounding Bitcoin also turned sour. On Stocktwits, chatter rose to ‘normal’ levels, but sentiment shifted to ‘bearish’ territory from the ‘neutral’ zone a day ago. 

One user called Bitcoin’s drop on Monday the first ‘flash crash’ of 2025.

Other users voiced concerns that Bitcoin could drop further, advising others to hold off on purchases until prices fell further.

Bitcoin’s price more than doubled in the last year, but its gains for 2025 have slowed, standing at just 7.5% year-to-date.

The broader U.S. market also faces additional pressure this week as six of the Magnificent Seven stocks are slated to report earnings. 

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