Bitcoin dropped below $90,000 for the first time in seven months on Tuesday, reflecting a decrease in risk appetite among investors in financial markets. The cryptocurrency, known for its sensitivity to market risks, has reversed its gains from 2025 and is currently down by almost 30% from its peak of over $126,000 in October. Trading at $89,953 in the Asian market, it broke through key support levels around $98,000 last week.
Market analysts attribute the decline in Bitcoin to uncertainties regarding potential U.S. interest rate adjustments and the overall market sentiment, which has been shaky following an extended bullish period. According to Joshua Chu, co-chair of the Hong Kong Web3 Association, the ongoing sell-off is exacerbated by corporate entities and institutional investors unwinding their positions after joining the rally, thereby amplifying risks across the market.
Notable players in the crypto space, including mining companies like Riot Blockchain and Marathon Digital Holdings, as well as the exchange platform Coinbase, have experienced declines in line with the prevailing negative sentiment. Across Asia, markets witnessed a broad decline on Tuesday, with a particular emphasis on technology stocks in countries like Japan and South Korea.
In addition to Bitcoin, the cryptocurrency Ether has also faced persistent pressure, shedding almost 40% of its value from a peak above $4,955 in August to trade at $2,997 on Tuesday. The recent downturn in Bitcoin earlier this year foreshadowed a broader sell-off that impacted equities in April, following the announcement of U.S. tariffs, sparking concerns that the decline in crypto could signal a broader market correction.
According to Matthew Dibb, chief investment officer at Astronaut Capital, the overall sentiment in the crypto market has been subdued since the leverage-driven downturn in October. He highlighted a critical support level at $75,000, which could come into play if market volatility remains elevated.