Cryptocurrency markets experienced a significant sell-off on January 27, 2025, as investor sentiment turned negative following news related to DeepSeek AI. The sell-off saw Bitcoin (BTC) dropping below $100,000 and altcoins turning red amidst a broader tech stock downturn. According to data from Coinglass, total crypto liquidations surged by over 850% in the past 24 hours, with nearly $1 billion in long and short positions being wiped out.
By 2 pm ET on January 27, total liquidations had reached approximately $993 million, with long positions accounting for over $883 million and short positions at about $110 million. More than 344,000 crypto traders were liquidated during this period, with the largest single liquidation order amounting to $98.46 million in BTC-USDT on the HTX exchange. Liquidations also affected other major cryptocurrencies, with over $311 million in Bitcoin, more than $143 million in Ethereum (ETH), and nearly $50 million in Solana (SOL) longs and shorts being liquidated. XRP and Dogecoin also saw significant liquidations, with $42 million and $33 million in positions being wiped out respectively.
The sell-off in the crypto market coincided with Bitcoin’s decline below $98,000 and Ethereum’s drop to $3,000. The total crypto market cap fell by 8%, settling at $3.3 trillion. The sell-off in crypto assets was part of a broader decline in risk assets, triggered by market reactions to DeepSeek, an AI system developed in China. Analysts have highlighted that DeepSeek poses a threat to U.S. dominance in the AI sector, as it was developed at a fraction of the cost of U.S.-based projects like OpenAI and is open-source.
The negative market sentiment also impacted tech stocks, with AI chip maker Nvidia’s stock falling by 17%, while Advanced Micro Devices was down 6% and Qualcomm by 2%. Tech giants like Microsoft, Alphabet’s Google, and Amazon also saw their stocks in the red. The market uncertainty led analysts to question whether former U.S. President Trump would intervene to support risk assets or let the market fend for itself.
Overall, the sell-off in the crypto market and broader risk assets highlighted the impact of news related to DeepSeek AI on investor sentiment. The market will be closely watched in the coming days to see how it reacts to these developments and whether there will be any further fallout from the DeepSeek AI news.