Jan. 27, 2025

CoinDesk 20 Index: 3,535.92  -9.64%
Bitcoin (BTC): $98,941.89  -5.62%
Ether (ETH): $3,058.14  -7.39%
S&P 500: 6,101.24  -0.29%
Gold: $2,764.15  -0.31%
Nikkei 225: 39,565.80  -0.92%

BTC fell nearly 6% to $99,000 from a Sunday high of over $105,000, sliding just as Asian markets opened. The decline came despite President Donald Trump's Friday order for the creation of a crypto policy group to advise and drive the U.S. industry within six months. The drop tracked U.S. stock indexes — whose movements bitcoin tends to mirror — with futures of the S&P 500 and Nasdaq 100 down as much as 2.15% ahead of the market open. Much of the concern draws from a possible overvaluation in U.S. tech companies. China-based DeepSeek’s latest AI model is significantly cheaper to produce and was built using open-source technology that is easy to access.

Bitcoin's perpetual futures funding rates, periodic payments made between long and short positions in perpetual futures contracts, flipped negative, according to Velo Data. It's a sign of more bearish sentiment in the market, of traders chasing short positions in anticipation of lower prices. Futures tied to Nasdaq have dropped over 3.5%, with chipmaker NVIDIA, the bellwether for all things AI, down 10% in pre-market trading. The negative flip in funding rates has tended to mark local price bottoms. Besides, there is always a risk of a short squeeze — bears throwing in the towel and squaring off their bets, putting upward pressure on prices. That said, the bearish flip means it's too early to call short BTC as an overcrowded trade.

Bullish bets on higher crypto prices lost $770 million in the past 24 hours, coinciding with BTC's fall below $100,000, leading to some major cryptocurrencies losing momentum in a bloody start to the week.Solana’s SOL and DOGE dropped more than 10% to lead losses among majors, while ETH, XRP and ADA fell as much as 9%. Overall market cap fell 8.5% as of Asian afternoon hours Monday. Futures markets reflected these losses, with traders of BTC-tracked products losing $238 million in the past 24 hours, mainly during early European and Asian afternoon hours. SOL and DOGE bets lost a cumulative $50 million, altcoin-tracked products lost $138 million and ether-tracked futures lost $84 million.

Bitcoin may be set to drop to $75,000 should it trigger a so-called "double top" bearish reversal pattern.

A double top comprises two consecutive peaks at approximately the same price, with a trendline drawn through the low point between these peaks. The failure to break above the previous peak, followed by a subsequent decline, suggests that the uptrend is losing momentum.

A breakdown of the horizontal trendline support, the double top neckline, is said to confirm a bullish-to-bearish trend change.

BTC has pulled back to $100,000 at the time of writing, having failed to maintain a foothold above the December high last week. In other words, the largest cryptocurrency looks to have formed a double top, with neckline support positioned around $91,300.

A UTC-hours close below the neckline level would confirm the bearish reversal pattern, potentially triggering a decline to $75,000. This target is calculated using the measured move method, subtracting the gap between the twin peaks and the neckline from the neckline level.

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- Omkar Godbole