The price of Dogecoin has slid to $0.33 per coin, after a brutal rout on Monday sparked by market fears over DeepSeek, a new Chinese AI (artificial intelligence) app threatening American dominance in the sector.

Some analysts are even forecasting that Dogecoin’s price might dip further, dropping to $0.26 in a sharp price collapse.

Dogecoin has seen its trading volume in the last 24 hours dip by 41% , according to CoinMarketCap, and it currently maintains a market capitalization of just $48.9 billion.

Some in the crypto industry, however, claim that recent DeepSeek fears might be overblown, and that the price of Dogecoin will stabilize as the overreaction subsides. “The U.S. remains the objective global leader on AI development,” said Chris Chung, founder of Solana-based swap platform Titan.

“Everyone got so overexcited about yesterday’s news that China has developed a substantially cheaper version of ChatGPT that they failed to notice that China isn’t doing anything revolutionary or new,” he said. “They’re simply doing what the US has already done at a much lower cost. But the most advanced models are actually still being developed in the U.S.”

“It is, of course, concerning in the sense that if Chinese companies train their models better, they could eventually outcompete American AI models in the future,” Chung added. “The DeepSeek news also suggests that U.S. sanctions on GPU exports aren’t working and China is just finding workarounds. But while it is a worry, I think the US is still very far away from losing its competitive edge when it comes to AI. So the market has simply overreacted, as it so often does.”