Bitcoin Gains 4% to $103,000, Easing Monday’s Losses; XRP Leads Crypto Recovery

Bitcoin (BTC) has risen by 4% over the past 24 hours, reaching approximately $103,000 early on Tuesday, helping to recover from the heavy losses of the previous day. The price bounce follows a volatile Monday, when China’s DeepSeek AI breakthrough sparked a sharp sell-off in U.S. stock indexes, driven by concerns over the overvaluation of AI stocks.

XRP was the standout performer among major cryptocurrencies, surging 12%, while Cardano (ADA), Binance Coin (BNB), Solana (SOL), and Dogecoin (DOGE) also saw impressive gains of up to 9%. Ethereum (ETH) added 4.5%, contributing to a 3% rise in the overall market capitalization.

The recent 4% increase in Bitcoin’s price helped offset some of Monday’s downturn, which saw over $1 billion in futures liquidations and an 8.5% drop in the CoinDesk 20 (CD20) index at its lowest point. Typically, large liquidation events can indicate market corrections, often presenting potential buying opportunities, as CoinDesk pointed out.

Among midcap cryptocurrencies, TRUMP tokens led the charge, rising 12%, reflecting a broader recovery in tokens with market caps under $5 billion. The positive sentiment was bolstered by Tuttle Capital’s filing for the first-ever 2x leveraged ETFs in the U.S., proposing products designed to provide 200% returns based on the daily performance of major cryptocurrencies, including TRUMP, MELANIA, and BONK.

The sell-off on Monday was largely attributed to DeepSeek’s breakthrough, with the Chinese AI firm’s model reportedly surpassing OpenAI’s in performance despite a smaller budget and fewer resources. DeepSeek’s model was developed on just $6 million, while OpenAI, which raised $6.6 billion and boasts a $157 billion valuation, relies on far more extensive resources.

However, some market observers believe that DeepSeek’s development is just one of many factors influencing the market. Nick Ruck, director at LVRG Research, stated that while fears over DeepSeek initially led to a sell-off, they also created a buying opportunity for cryptocurrency markets. “The crypto industry is not directly competing with DeepSeek; in fact, crypto projects using AI can integrate DeepSeek’s open-source model to drive innovation and efficiency,” Ruck explained.

Looking forward, traders are focused on macroeconomic data releases this week, including the Federal Open Market Committee (FOMC) meeting from January 28–29, as well as earnings reports from major companies such as Apple, Meta, and ASML. Ruck remains optimistic about Bitcoin’s long-term prospects, citing the positive regulatory environment for the crypto sector in the U.S. and globally.

The FOMC meeting is not expected to signal any rate cuts, which has historically impacted Bitcoin’s price as investors adjust their portfolios in response to the Federal Reserve’s decisions.

In a more whimsical note, Singapore-based QCP Capital included astrological predictions in their Tuesday market update, linking the upcoming Year of the Snake to the market’s twists and turns. The firm suggested that the resilience and adaptability symbolized by the Snake in Chinese astrology will be key traits for navigating the opportunities and challenges of 2025.

Bitcoin performed well in 2024, the Year of the Dragon, and analysts are hopeful that, despite the market’s unpredictability, 2025 could bring new highs for Bitcoin, as indicated by the astrological movements of the “Rough Green” and “Brown Tree” snakes.