The Chinese competitor to ChatGPT has impacted the stock prices of US technology companies and dragged down Bitcoin, which dropped below the $100,000 mark for the first time in 10 days.
4-hour BTC/USDT chart. Source: Cryptovizor cryptocurrency screener
The Chinese service not only offers more favorable rates but also reportedly has several significant advantages over ChatGPT according to user reviews. The application has already become the most popular free product in the App Store. Expectations of breakthroughs in the field of AI have been the main driver of growth in the US stock market over the past two years.
Popular trader Credible Crypto notes that Bitcoin is just moving towards the lower boundary of the range it has been in for a week. In his opinion, this is a healthy correction, which will remove liquidity from the lower boundary while maintaining it at the upper boundary.
4-hour BTC/USDT chart. Analysis: Credible Crypto
Trader CJ expects the formation of a higher low. According to him, two scenarios are possible: there will either be a false breakout of the current low (SFP — Sweet Fake Point), or the price will decline to the level at the beginning of the year, where unrealized demand is concentrated on the daily timeframe. He also noted that losing the low from which the rally to the all-time high began would be a negative signal.
1-day BTC/USDT chart. Analysis: CJ
Former CEO of the cryptocurrency platform BitMEX, Arthur Hayes (Arthur Hayes) is more pessimistic. He warns about the possibility of Bitcoin falling to $75,000 before the price rallies to $250,000 by the end of 2025.
A meeting of the US Federal Reserve will be held on January 29. According to the Chicago Mercantile Exchange, the probability of reducing the rate by 0.25% is only 0.5%.
Probability of Fed rate change. Source: Fedwatch
Donald Trump at the World Economic Forum in Davos demanded an immediate cut in interest rates amid falling oil prices. According to him, Fed Chair Jerome Powell will heed this demand.
On January 30 (16:30 Moscow time), market participants are awaiting a flurry of important macroeconomic statistics, including GDP data for the fourth quarter and the personal consumption expenditures index (PCE), which is considered the Fed's preferred inflation indicator.
According to CryptoQuant data, for Bitcoin holders with up to three months of experience, the critical level is $96,000. A fall below this level will lead them to start fixing losses. For investors with up to six months of experience, the similar level is $90,000.
Ki Young Ju, CEO of CryptoQuant, notes the divergence in behavior between short-term and long-term investors. While the former continues to increase positions, the latter are reducing their investments. According to him, this pattern is characteristic of a bull market.