Today’s downturn in the crypto market comes after Chinese artificial intelligence lab DeepSeek released DeepSeek R1, which had a significant impact on the prices of AI-related tokens. The total cryptocurrency market capitalization in the AI space has also been hit hard, falling 10% from $47.54 billion on January 26 to $42.50 billion at the time of writing. Trading volume increased by more than 42% in 24 hours to $3.55 billion, adding to the intensity of seller pressure. Additionally, the cryptocurrency market is down, accompanied by a wave of leveraged liquidations. Leverage allows traders to borrow funds to increase a trading position, thus amplifying potential gains and losses. The latest data shows that the crypto market has seen nearly $860 million in liquidations in the past 24 hours, of which $794 million was long liquidations. $260 million in long Bitcoin positions have been liquidated, and liquidations are still ongoing at the time of publication. Cryptocurrency prices fell today, causing the Total Market Capitalization of All Cryptocurrencies (TOTAL) to lose key support at $3.38 trillion provided by the 50-day simple moving average (SMA) on the daily chart. Additionally, the Relative Strength Index (RSI) fell to 43 from positive territory of 57 on January 24. This indicates that market sentiment is turning bearish. If the sell-off intensifies, the total crypto market capitalization could fall to the psychological support level of $3.20 trillion. Once this support is lost, the market could fall further to $3.1 trillion, a level supported by the 100-day SMA. Notably, this has been TOTAL’s dynamic support trendline since November 21st. On the other hand, a resurgence in buying pressure could push the crypto market cap back above the 50-day SMA and towards the local high of $3.69 trillion seen on January 20.