The cryptocurrency market encountered turbulence, falling by 6.31%, bringing the total market cap down to $3.37 trillion.

The cryptocurrency market encountered turbulence, falling by 6.31%, bringing the total market cap down to $3.37 trillion. This decline follows a series of events, including the rise of the Chinese AI app

The cryptocurrency market experienced turbulence on Thursday, with prices declining sharply. This follows a series of events that have unfolded rapidly in recent days.

Key Takeaways:

* The cryptocurrency market cap fell by 6.31% to $3.37 trillion.

* DeepSeek's open-source model, offering high functionality at minimal cost, raises concerns about the valuation of American tech stocks, especially those linked to AI.

* This model also sparked anxieties in the AI market, leading to significant sell-offs in U.S. equities.

* The panic over DeepSeek's capabilities, capable of performing various tasks like summarizing articles and writing poems, heavily impacted AI-based tokens, which lost over 20% of their capitalization.

* Donald Trump's presence has fueled interest in cryptocurrencies and AI technologies, contributing to the inflation of market valuations, particularly in the tech and crypto sectors.

* One analyst predicts a correction in Bitcoin, setting a price target of $70,000 to $75,000.

* The Federal Reserve's decisions on interest rates and the broader market response to global economic conditions will be crucial in determining the direction of the crypto market.

Bitcoin Struggles to Maintain Gains as Broad Economic Factors Come Into PlayBroader economic factors are contributing to Bitcoin's price action, including U.S. interest rate decisions and the upcoming Federal Open Market Committee (FOMC) meeting. This week, the Federal Reserve is expected to keep interest rates unchanged in its first policy meeting since former President Donald Trump took office.

Its decisions and the market's reaction to global economic conditions will play a key role in shaping the direction of the crypto market.

"I am calling for a $70k to $75k correction in $BTC, a mini financial crisis, and a resumption of money printing that will send us to $250k by the end of the year. I also see $ETH slicing through $2k again on its way to new highs," one analyst stated.

"We're entering a period of intense volatility with BTC, and this analyst predicts a natural correction to the $70,000 to $75,000 range, setting the stage for a later recovery to reach the $250,000 level by year's end. Additionally, anticipate substantial losses for major AI-based tokens as they grapple with a 20% decline in market cap. Finally, Trump's presence is seen fueling interest in cryptocurrencies and AI technologies."