Bitcoin’s support line remains high while Central Banks differ on interest rate direction
Last Updated on 1 February 2025 by CryptoTips.eu
Two striking stories marked the week. The first was that the entire ‘DeepSeek’ panic only lasted one day and the second is the fact that the various Central Banks (of the Eurozone, the United States and Japan) differing view on interest rates seem to have no impact on Bitcoin’s support line. The price of the largest digital currency remains exceptionally high.
DeepSeek
For a moment on Monday it seemed as if the world was going to collapse. The news about DeepSeek, a Chinese competitor to ChatGPT that was apparently made at very low cost and consumed less energy, threatened to drag down the tech and crypto markets for the foreseeable future. A small crash took place, but it was over after one day. As from Tuesday, Bitcoin climbed steadily higher again, and the impact on stocks such as Nvidia, Meta, Vistra, ARM and the Dutch ASML also remained fairly limited if you look at it over a whole week.
By now, analyst claim that DeepSeek used ChatGPT’s model to develop its own code and is actually just a cheap copy. Whether this is correct remains to be seen in the future. Several countries are planning a ban as the app is linked to the Chinese government.
Central Banks
Secondly, it seems that Bitcoin is less controlled by the direction of Central Banks than before, mainly due to the fact that they no longer agree on the direction of interest rates. The American Fed is keeping interest rates where they are, the ECB is lowering them by a quarter percentage point, the Japanese hincreased their interest rate by a quarter. Bitcoin seems to have a very high support line which is very difficult to break at the moment.
Unclear what is needed for a new boost upwards, but it seems to me that a ride lower at this time is only possible because of a major geopolitical disaster.
January ended with a 9% percentage gain for Bitcoin, which is good news considering that there is normally a seloff in the first month of the year that follows the halving. At this moment, February looks positive.
