The statistical chart from 2018-2024 shows that Bitcoin and Altcoins often perform well during the Chinese New Year period.
Author: 1912212.eth, Foresight News
The annual Chinese New Year market trend has not materialized, but instead experienced another major decline, further undermining the already fragile market confidence.
Bitcoin has dropped from around $105,000 since around 3 am on January 27, reaching a low of around $101,168, nearly losing the $100,000 mark. Ethereum has also fallen from around $3,300 to $3,188, and has since rebounded above $3,200. SOL, which hit a new high just a few days ago, has also fallen to above $230 due to the overall market decline.
The Altcoin market is also in a dismal state, with 24-hour declines of over 15% for TRUMP, over 17% for AI16Z, over 15% for AIXBT, over 14% for COOKIE, and over 7% for WLD. Fartcoin fell 22.4%, GRIFT fell 33.1%, and BUZZ fell 33.2% in 24 hours.
In the public chain sector, SUI fell over 8% to $3.78, and SEI fell over $0.32 to $0.32. Most L2s also saw declines of 7%-10%.
In terms of contract data, the 24-hour total network liquidation was $449 million, with long positions liquidated for $404 million, with the largest single liquidation occurring on HTX, with a BTC-USDT trading pair value of $98.46 million.
What factors are affecting the current market?
The Fed's decision this week, with the market preemptively avoiding risk
The Fed will announce its January interest rate decision at 3am Beijing time on Thursday. The market generally expects the Fed to keep the federal funds rate target range unchanged at 4.25%-4.5% this month, pausing its easing after three consecutive rate cuts in the second half of last year. According to the CME Group's Fed Watch tool, the probability of the Fed standing pat this month is as high as 99.5%.
It is worth noting that although the Fed is widely expected to skip a rate cut this month, investors will still closely focus on Fed Chair Powell's outlook on the future path of interest rates.
Last Thursday, US President Trump emphasized in a speech at the World Economic Forum in Davos that he will demand the Fed to immediately lower interest rates, and claimed that he understands monetary policy better than those responsible for setting it. However, it is clear that the highly independent Fed may not necessarily follow Trump's wishes, especially given that Trump's policy agenda and trade policies may exacerbate US inflation.
Some market analysts also believe the Fed may start raising rates this year.
Thanos Papasavvas, founder and CIO of ABP Invest, wrote in a column that "we do not believe the Fed will cut rates in 2025 - we do not even think the Fed has finished (tightening monetary policy), on the contrary, we expect the flexible US economy and Trump's policies to push up inflation expectations, forcing Fed Chair Powell to start raising rates from September."
He also mentioned that the Fed hopes to maintain its anti-inflation credibility after wrongly judging previous price increases as temporary. Therefore, Papasavvas predicts that if forced to choose, the Fed will "be super orthodox, choosing to fight inflation rather than preserve employment."
The Fed's statements this week will be the focus of market attention, and market volatility will increase. Some traders have chosen to withdraw in advance to wait for clearer signals.
In addition, after the initial loud threats of tariffs in the first week, Trump has taken actual action. On January 26, local time, President Trump said he would impose a 25% emergency tariff on all goods entering the US from Colombia for refusing to accept illegal immigrant deportation flights, which will increase to 50% within a week. Trump's tariffs and anti-immigration measures have also put pressure on US stocks.
US stock futures fell sharply in early Asian trading on Monday, with Nasdaq 100 futures down about 1.2%, S&P 500 futures down 0.5%, and Dow futures down 0.2%. The turmoil in traditional financial markets has also cast a shadow over the crypto market.
DeepSeek ignites China-US rivalry, AI sector sees rotation
Recently, the R1 model (DeepSeek R1) released by the Chinese AI company DeepSeek has seen a surge in popularity. On January 24, in the professional large model ranking Arena, the DeepSeek-R1 benchmark test has risen to the third place among all large models, and it is tied for first place with OpenAI o1 in the style control model (StyleCtrl) category. Its Arena score reached 1357, slightly higher than OpenAI o1's 1352.
The creativity of Chinese AI companies is astounding the world. Mark Andreessen, the founder of top Wall Street venture capital firm a16z, said on social media that DeepSeek R1 is one of the most amazing and impressive breakthroughs he has seen, and it is open-source, a gift to the world. Jim Fan, a senior scientist at Nvidia and head of the AI agent business, also highly praised it.
On January 27, the DeepSeek app topped the free app download charts in the Apple App Store in China and the US, even surpassing ChatGPT in the US. The DeepSeek concept has fermented, and AI concept stocks in the A-share market have seen leading gains.
The impact of DeepSeek has also spread to the crypto sector, with the AI concept capital sector seeing rapid rotation, and some previously hot project tokens even experiencing five consecutive daily declines. Meanwhile, the meme token SEEK (DeepSeek) on the Solana chain has seen its market cap surpass $30 million, with a 24-hour trading volume of $569 million.
Future market outlook
The market sentiment is unstable, and some even believe it has already turned bearish. What's next? Will there still be a bull market?
Arthur Hayes, co-founder of BitMEX, just published a forecast that "Bitcoin will experience a significant correction in the short term, with the price potentially falling to the $70,000 to $75,000 range, accompanied by a small financial crisis. As global central banks resume quantitative easing and inject liquidity back into the market, Bitcoin will restart its upward trend and is expected to surge to $250,000 by the end of the year."
However, in terms of the short-term Chinese New Year market performance, the statistical chart from 2018-2024 shows that Bitcoin and Altcoins often perform well during this period.
Whether the auspicious market trend can be replicated again during the upcoming Chinese New Year on January 29 is worth close observation.
