Bitcoin (BTC) Rapid Recovery After Deepseek Light Grey Swan Event: Market Analysis
Bitcoin (BTC) is fast recovering after a traditional stock market fall had caused it to also take a crash. These spikes to the downside were caused by the introduction into the AI space of the Chinese-based Deepseek model. Is this dip now over?
The black swan that wasnt
A black swan is a perceived negative event for the market that is unforeseen, and which can cause a precipitous price crash. It might be argued that the appearance on the AI scene of a real competitor to the US leaders in this space, may have had the potential to be a black swan. The fact that this new company is based in China probably added fuel to the fire.
However, now that things have calmed somewhat, and the market has had time to digest the news, it turns out that Deepseek is open-source, and that its various innovations can actually benefit the AI industry as a whole. The awful black swan that initially threw the market into a spin has now become a far more benign bird of a light grey colour.
Nvidia takes biggest one-day loss in history
Nevertheless, the market crash still took place, and chip manufacturer Nvidia (NVDA) saw the biggest one-day loss in history after nearly $600 billion was erased from its market cap.
Nasdaq precipitous fall
Source: TradingView
The Nasdaq fell as much as 3.75% on Monday. As can be seen on the daily chart above, the price fell precipitously, and the recovery was stopped short at $19,340. After the reopening on Tuesday, it will be interesting to see whether the price will break up again, or whether previous support will now become resistance.
$BTC crash bought back up same day
Source: TradingView
From the depths of despair on Monday, the $BTC price is once more sitting pretty above the $102,000 horizontal support. The $7,000 crash succeeded in taking the price down to retest the top of the previous wedge formation. The fact that the price was bought almost all the way back up by the end of the day was very bullish.
$BTC ready for a sustained rally?
Source: TradingView
Its been said before, but what a difference a day makes. The weekly candle is now looking very bullish. Of course, with the high volatility that the market has been experiencing over the last few weeks, this can change, and very quickly.
However, as it stands, the Stochastic RSI (bottom of the chart) is once more shaping for a bullish cross to the upside. All it will probably take to leave this current order block behind in the rear view mirror is a sustained rally. Could this be the beginning of it?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Text source: Crypto Daily™
