Cryptocurrency Market Faces Massive Liquidation: Losses Exceed $500 Million
Amid the success of the Chinese AI startup DeepSeek, whose app surpassed ChatGPT and took the top spot in the App Store, investors began mass profit-taking. This has put significant pressure on the market, particularly on cryptocurrencies.
Main Reasons:
1. DeepSeek's Success: The sudden surge of interest in the Chinese AI startup has prompted investors to reconsider their positions in U.S. tech stocks, which may be overvalued.
2. Preparation for Chinese New Year: Traditionally, during this period, many investors convert assets into cash, which has intensified capital outflows from the market.
3. General Nervousness: The combination of these factors has led to a cascade of liquidations, especially among long positions.
Consequences:
The cryptocurrency market, being the most volatile, reacted with a sharp decline. However, such a correction may create new opportunities for long-term investors.