Bitcoin prices saw a slight rebound on Tuesday, surpassing $102,000 after a dip to $97,777 the previous day. MicroStrategy's acquisition of 10,107 Bitcoins and the launch of its convertible preferred stock offering, STRK, fueled this recovery. The report also highlights the increasing correlation between Bitcoin and traditional markets, particularly in light of concerns regarding China's Deepseek, a potentially disruptive AI model.
Bitcoin experienced a slight recovery on Tuesday, trading above $102,000 after dipping to a low of $97,777 the previous day. This resurgence was fueled by MicroStrategy's significant acquisition of 10,107 Bitcoin for $1.1 billion at an average price of $105,596 per Bitcoin. This purchase increased MicroStrategy's holdings to 471,107 Bitcoin, valued at $30.4 billion, with an average acquisition price of $64,511 per Bitcoin.
Concurrently, MicroStrategy announced the launch of a convertible preferred stock offering called STRK, available to institutional investors and select retail investors. This move has sparked considerable interest and debate within the investor community and the broader cryptocurrency landscape, particularly regarding its potential impact on Bitcoin's market dynamics and MicroStrategy's financial strategies.Adding to the volatility, a report by QCP Capital highlighted Bitcoin's correlation with traditional markets, noting that the recent decline below $100,000 coincided with concerns surrounding China's Deepseek, a potentially disruptive Large Language Model (LLM). Deepseek's cost-efficiency and open-source nature pose a challenge to US AI dominance, raising anxieties about its implications for US equity markets. Furthermore, a Bitfinex Alpha report emphasized Bitcoin's strengthening correlation with the S&P 500 and NASDAQ, solidifying its position as a significant risk-on asset. Any substantial shifts in equities could trigger a cascading effect on Bitcoin, exacerbating volatility.Dr. Sean Dawson, Head of Research at Derive.XYZ, stated in an exclusive interview with FXStreet that the probability of Bitcoin falling below $75,000 by the end of the first quarter has risen to 9.2%, up from 7.2% in the previous 24 hours. This upward trend is attributed to heightened demand for put options to hedge against potential downside risks, reflecting a growing sense of caution among traders.Bitcoin's price found support around its 50-day Exponential Moving Average (EMA) at $98,223, preventing further decline and allowing it to recover above $102,000. The Relative Strength Index (RSI) indicator on the daily chart, currently at 55, suggests a slight increase in bullish momentum. However, traders should remain cautious as the Moving Average Convergence Divergence (MACD) indicator is converging. A bearish crossover of the MACD on a daily basis could signal a downtrend and warrant a shift in trading strategies. If the 50-day EMA holds as support, Bitcoin could potentially rebound and retest its January 20 all-time high of $109,588. Conversely, a sustained break below the 50-day EMA could lead to further decline, with the next key support level located around $90,000.
BITCOIN MICROSTRATEGY STRK CONVERTIBLE STOCK AI DEEPSEEK TRADITIONAL MARKETS VOLATILITY
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