Journalist
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Since October’s crash, the relationship between stocks and crypto has become more complicated. While the crash wiped out billions across all markets, crypto was hit harder than stocks.
NASDAQ even closed the fourth quarter up 2.4%, while Bitcoin [BTC] decreased 6.3%, showing that investor confidence is leaning more bullishly towards equities. So any FUD in stocks can quickly transition into crypto.
Building on this, the US stock market is already nervous ahead of another “DeepSeek-led” crash. Naturally, this puts crypto, and especially Bitcoin, in the spotlight, given how it has reacted to similar events in the past.
Source: TradingView (NVDA/USD)
For context, Chinese AI startup DeepSeek is reportedly preparing for release its next generation model very soon. Last year, when DeepSeek released DeepSeek-R1 in January 2025, the market reacted sharply.
NVIDIA [NVDA]For example, the Nasdaq 100 fell 17% in one day, wiping out $600 billion, while the Nasdaq 100 fell 3%, meaning a loss of $1 trillion. Other tech giants like Microsoft fell 5%-6%, wiping out hundreds of billions in market capitalization.
Notably, crypto was also hit hard: more than $330 billion was wiped out, while Bitcoin and altcoins fell 8%-15% in one day. This highlights how stock market crashes have recently spilled over into crypto, making the upcoming DeepSeek news particularly important.
Bitcoin faces a major test as market fear mounts
Since the October crash, sentiment has emerged as a key market indicator.
Simply put, the broader crypto market is facing heightened capitulation risks not due to “crypto-specific” bearish trends, but because macro volatility is forcing capital out of risky assets as sentiment quickly shifts to risk-off.
Illustrating this trend, the Bitcoin Fear & Greed Index continues to hover in the red, indicating continued bearish sentiment. Consequently, even small shocks in stocks can spill over into crypto, amplifying price swings.
Source: BGeometrics
In particular the the market is already pricing in a $60k break after that.
At the same time, the growing FUD around DeepSeek, historical trends pointing to possible bankruptcies, Bitcoin’s relative weakness versus stocks, and fragile sentiment all indicate that this positioning is no fluke.
Instead, macro data and market setups show that Bitcoin’s recent moves have largely been driven by macro volatility, underscoring why another DeepSeek event could likely push BTC below this key support zone.
Final summary
- Bitcoin and crypto are vulnerable as macro volatility drives capital out of risky assets, while the Fear & Greed Index is still in extreme fear zones.
- Historical trends and the growing FUD surrounding DeepSeek suggest that another major event could likely push BTC below $60,000.