The cryptocurrency market faced turbulence on January 27 due to a significant drop in technology stocks. Since then, Bitcoin 
$105,072 has made a recovery, trading at $102,668 with a 3% increase in the last 24 hours. In contrast, shares of mining companies fell between 20% and 30%. Companies investing in artificial intelligence were particularly hit hard, as evidenced by a 17% collapse in Nvidia shares, highlighting the connection between the cryptocurrency and technology sectors. Market experts emphasize that the upcoming Federal Reserve interest rate decision and the financial outcomes of major tech companies will be pivotal in determining market direction. This correction could create new opportunities for investors as profit-taking on overvalued assets has been triggered.
Nvidia Stock Collapse Shakes Mining Companies
The downturn in Nvidia shares on January 27 resulted in the most significant drop in the cryptocurrency mining sector over the past year. Major companies such as Riot Platforms and MARA Holdings experienced losses of 8.7% and 16%, respectively. Companies pivoting towards AI, including Core Scientific, Bitdeer, and Cipher Mining, faced declines of 25% to 30%. The emergence of China’s DeepSeek as a cost-effective option has raised uncertainties in AI projects, casting doubt on the potential of mining companies in this area.
Liquidity issues in the market led to the liquidation of nearly $1 billion in leveraged positions. Cryptocurrency-focused companies like Coinbase and Galaxy suffered losses of 6.7% and 15.8%, respectively. In contrast, MicroStrategy demonstrated relatively resilient performance due to its Bitcoin reserves.
Relationship Between Technology and Crypto Deepens
Nvidia‘s historic collapse directly impacted the cryptocurrency market. Standard Chartered analyst Geoffrey Kendrick noted that the correlation between Bitcoin and technology stocks has strengthened. Indeed, AI-themed altcoins like Render and Filecoin closed the day with double-digit losses. Meanwhile, interest in AI projects on the Solana 
$241 network waned, leading to a loss of over 10% for SOL.
Nansen analyst Aurelie Barthere indicated that overly optimistic expectations from investors triggered the correction. Barthere stated, “The financial results of Nvidia and other giants will be critical for the market in the coming days.” She also added that high-risk assets like Solana could become attractive again due to this decline, especially for investors who missed out after Donald Trump’s electoral victory.
While experts signal ongoing market fluctuations, they advise investors to focus on medium to long-term trends rather than short-term price movements.
