Bitcoin has faced renewed selling pressure, dipping below $100,000, as global markets react to China’s emergence as a major player in artificial intelligence (AI). The rise of Deepseek, a cost-efficient, open-source AI company, has sparked concerns about U.S. dominance in the sector, leaving analysts closely monitoring potential geopolitical and economic responses.

QCP Capital highlighted the disruptive potential of Deepseek, noting its cost-efficient approach and innovative technology as significant challenges to U.S. equity markets and AI leadership. In a recent analysis, they emphasized the implications for global risk assets, including Bitcoin, suggesting that strategic measures might be needed to counteract these developments.

One such measure being speculated is the creation of a Strategic Bitcoin Reserve. While the idea of a “national digital asset stockpile” has gained some attention, no concrete plans have emerged. QCP analysts argue that without confirmation of such a reserve, Bitcoin is unlikely to see significant upward movement in the near term.

Market sentiment also reflects this cautious outlook. According to QCP, risk reversals in the options market favor bullish strategies only from March onwards, indicating muted expectations for a breakout before the end of the first quarter. Heightened activity in the options market suggests traders are hedging ahead of the Federal Open Market Committee (FOMC) meeting on January 30.

However, analysts believe Bitcoin’s resilience could be tested if geopolitical tensions escalate. Should former President Trump take aggressive steps against China, such as imposing tariffs or introducing restrictive policies, Bitcoin may continue trading within its current range, offering some stability amid broader market volatility.