Success of Chinese AI model won't affect bitcoin too negatively

Bitcoin quotes began the current week with large-scale sell-offs as part of the general decline in financial markets. The main cryptocurrency's price had fallen by almost 7%, but by the end of the trading session on Monday, the losses were reduced to just over 3%. Today we are observing further rebound, in the course of which the price may quickly return to the level of 105000. Yesterday's news background will gradually lose its impact in favor of more fundamental factors.

The jump in pessimism among Western investors on Monday was triggered by reports of significant progress in work on the Chinese DeepSeek AI model. Its development could undermine the dominance of American and European companies in the industry, in which huge investments have been made in recent years. The negative impact of this news on bitcoin is not obvious, in fact, bitcoin was affected along with all other high-tech industry assets.

Charlie Morris, Chief Investment Officer at ByteTree Asset Management, points out the correlation between the bitcoin price and the Nasdaq 100 index. Over the past 30 days, their correlation has amounted to almost 70%, which explains yesterday's synchronized drop of both indicators. Nevertheless, apart from the cooling demand for shares of Western IT companies, the cryptocurrency market has no apparent reasons for a strong fall.

According to Caroline Mauron, co-founder of Orbit Markets, in the near future the bitcoin price will remain in the range of $90,000 to $110,000. The cryptocurrency market has already played out Donald Trump's presidency, and the further growth requires new factors. Such a trigger, for example, could be the first US authorization for government funds to invest in bitcoin. The bill in question was introduced yesterday in the Senate of Arizona, which may be followed by other states.

As long as the bitcoin quotes drawdowns below the 100000 level are steadily bought back, the chances of a quick recovery to the 105000 level remain high.

Consider the following trading strategy:

Buy BTCUSD. Take profit – 105000. Stop loss – 99500.