Bitcoin Recovered to Some Extent from a Sharp Drop Triggered Yesterday by the Market's Reaction to DeepSeek

While the market reacted initially with panic with traders selling risky assets, the market stabilised today with Bitcoin prices hovering near USD 102,000 but could continue to see risks.

Bitcoin recovered somewhat from a sharp drop on Thursday triggered by the market’s response to DeepSeek, which sparked concerns about the AI hype and impacted risk tolerance.

While the market initially overreacted with traders selling off risky assets, it steadied on Friday with Bitcoin prices remaining around $102,000 but facing further risks.

In response, crypto ETFs saw their first outflows on Thursday after seven days of inflows. Major BTC ETFs saw outflows exceeding $450 million in total.

As the selloff extended to other cryptocurrencies, some of which failed to recover, Ethereum spot ETFs also experienced outflows. These outflows may indicate a change in investor sentiment, which could limit significant upside for both Bitcoin and the broader crypto market in the near term amid the volatility in global markets.

However, major players in the crypto market are continuing to invest heavily in Bitcoin. Metaplanet is raising $745 million to acquire 21,000 BTC by 2026, in the largest such operation for Bitcoin in Asian equity markets. MicroStrategy is also continuing to acquire Bitcoins on a massive scale, which could help support prices.