A Volatile Start to an Eventful Week Ahead

The ‘DeepSeek crash’ reverberated through traditional markets yesterday, leading to a sharp 1.54% drop in the S&P 500 and a near 5% intraday plunge for the Nasdaq. NVIDIA, which has been a standout performer in recent months, suffered a historic setback. The tech giant closed the day down 17%, wiping out approximately $590 billion in market capitalisation—a record-breaking single-day loss for any stock, surpassing its previous record of $311 billion.

Crypto Markets React and Rebound

As discussed in yesterday’s Morning Note, crypto markets were not immune to the fallout. Bitcoin (BTC) dipped nearly 5%, reaching a low of $97.7k, while the majority of altcoins endured losses exceeding 10%. However, in a departure from traditional markets, crypto displayed resilience. Coins like SUI and XRP recovered after intraday losses of 10%, closing up by 3% and 1%, respectively.

Bitcoin clawed its way back to close at $102k, just $500 below its daily open—a strong recovery that signals underlying strength amidst broader uncertainty.

The volatility led to approximately $820 million in leverage liquidations. While this figure may seem substantial, it is relatively moderate compared to some of the more dramatic liquidation days seen in the past month.

Market Outlook: Promising Rebound, but Risks Remain

While this bounce is encouraging and Bitcoin has reclaimed its broader trading range, caution is still warranted. Thursday morning’s Federal Open Market Committee (FOMC) meeting looms large, with market participants nearly unanimous in expecting no rate cut. All eyes are on Federal Reserve Chair Jerome Powell’s press conference following the decision. His tone will likely set the direction for both traditional and crypto markets in the coming weeks.

Stormrake Spotlight: Ethereum (ETH) ($3,175)

Ethereum has rebounded perfectly from the lower boundary of its accumulation zone, climbing 5.41% from its recent low. Despite its current bearish structure and momentum, this accumulation zone remains a proven support level. For investors seeking undervalued opportunities, ETH at these levels presents a compelling case.

BTC/USD Key Levels and Price Action:

Bitcoin briefly dipped below the critical $100k support before staging a recovery. It is now forming a ‘W’-shaped pattern, with $100k proving to be a strong support level, bolstered by the top CPR line at $99.4k. To solidify this rebound, Bitcoin must reclaim all key moving averages and break above $104k. Achieving this would confirm the recent low as a short-term bottom, setting the stage for a potential retest of all-time highs.

BTC Total ETF Flows for 27 Jan: $ -158.6 million

ETH/USD Key Levels and Price Action:

Ethereum’s recovery mirrors Bitcoin’s, with a similar ‘W’-shaped pattern. However, it currently faces significant resistance at $3,207 and the 55-EMA. Reclaiming this resistance and flipping it into support is crucial for ETH to regain bullish momentum.

ETH Total ETF Flows for 27 Jan: $ -84.2 million

*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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