Possible Reasons Behind the Market Drop
I see two key factors that may have triggered this market downturn. While Bitcoin remains stable, altcoins suffered larger losses, likely due to thin liquidity and the fact that major investors are primarily focused on Bitcoin.
DeepSeek AI’s Impact
The launch of the DeepSeek AI model may have contributed to the decline. The event significantly impacted Nvidia’s stock, which, as one of the largest companies in the S&P 500, dragged down other stocks as well. Since crypto markets often follow stock market trends, this could have played a role in the recent drop.
FOMC & Interest Rate Decision
The FED’s FOMC meeting this week is expected to introduce market volatility. Since September 2024, the FED has been cutting interest rates, fueling a surge in both crypto and stock markets. However, forecasts now suggest the FED will keep rates unchanged, which may have led to the market decline immediately after the weekly open.