Bitcoin dipped below the $98,000 mark on Jan. 27 but has since recovered to trade around the key psychological level of $100,000. The drop was sparked by the meteoric rise of China-based AI app DeepSeek, which overtook ChatGPT in the U.S. app rankings and raised concerns about growing competition in the AI space.

Although not directly linked to cryptocurrencies, the shift toward safe-haven assets triggered $864 million in liquidations across the crypto market in just 24 hours, with Bitcoin longs accounting for $250 million. BitMEX co-founder Arthur Hayes warned of a possible sharp correction in Bitcoin but remains optimistic, predicting a potential rally to $250,000 by year-end if monetary easing resumes.

Bitcoin plunged below the moving averages on Jan. 27, but the bulls are trying to defend the 50-day SMA $99,382. Both moving averages are flattening out, and the RSI is near the midpoint, indicating a balance between supply and demand. If the price rises and maintains above the 20-day EMA $101,086, the bulls will again try to drive the BTC/USDT pair to $109,588. Conversely, a close below the 50-day SMA will open the doors for a fall to the support of the range at $90,000. Buyers are expected to aggressively defend the $90,000 to $85,000 zone because a break below it will signal that the pair may have topped out in the short term.

Ether slipped below the neckline of the head-and-shoulders pattern on Jan. 27. If the price closes below the neckline, the setup will be complete. The ETH/USDT pair could decline to $2,850, which is likely to act as a formidable support. If the price rebounds off $2,850 but turns down from the 20-day EMA ($3,308), it will indicate that bears are selling on rallies. That increases the risk of a break below $2,850. If that happens, the pair may drop to $2,400. Time is running out for the bulls. If they want to limit the downside, they will have to quickly push the price back above the 50-day SMA ($3,455). The pair may then rally to $3,745.

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