Bitcoin (BTC) experienced a significant pullback, dipping just below $98,000, representing a nearly 10% drop from its all-time high, which has led many investors to question the sustainability of the current bull market.
This decline is partly attributed to the growing concern surrounding China’s DeepSeek AI technology, which is seen as a major threat to the U.S. tech industry due to its ability to outperform at a much lower cost. Since President Donald Trump’s election, Bitcoin has surged from $66,000 to a new peak of $109,000, though it has experienced two separate 15% corrections along the way, alongside several smaller drawdowns. Thus, this recent 10% drop is in line with the volatility seen during the rally.
One important indicator of support in a bull market is the short-term holder cost basis, which represents the average purchase price for coins that have been moved in the last 155 days. Currently, this cost basis is around $91,000. If Bitcoin falls below this level, it could signal a shift in momentum, potentially putting pressure on the ongoing rally.
Bearish sentiment is gaining traction as Bitcoin’s funding rates have turned negative, indicating a shift in market sentiment. Prominent figures, such as Arthur Hayes, co-founder of Bitmex, have suggested that Bitcoin could see a correction down to the $70,000-$75,000 range before potentially reaching $250,000. Furthermore, CoinDesk’s Omkar Godbole has also pointed out that Bitcoin could experience a drop to $75,000 if a “double top” bearish reversal pattern takes hold.
This weakness is not confined to the cryptocurrency market, as U.S. stock futures are also feeling the strain, with the Nasdaq futures falling by up to 4%. This broader market sell-off suggests that risk-off sentiment is prevailing across financial markets.
