Bitcoin drops as rebound pauses
Bitcoin struggled to trade above $110,000 this week after a flash crash earlier in October dragged the crypto off record highs
Bitcoin dipped on Tuesday, reversing course after a weekend rebound ran out of steam as cryptocurrencies lagged other risk markets in advancing on easing U.S.-China trade tensions.
The world’s largest cryptocurrency headlined losses across crypto markets, even as broader risk appetite improved on Japanese political developments and expectations of more U.S.-China trade talks.
Bitcoin dropped 2.3% to $108,820 by 13:26 GMT.
Bitcoin struggled to trade above $110,000 this week after a flash crash earlier in October dragged the crypto off record highs and wiped out some $500 billion in crypto market capitalization.
October’s flash crash was seen sparking heightened risk aversion in crypto markets, with traders wary of making large bets amid heightened volatility in the sector.
Optimism over “Uptober,” a trend of crypto markets outperforming in October, was also seen fast fading amid Bitcoin’s rout, with the world’s largest crypto nursing an over 2% loss for the month.
So far this year, Uptober hasn’t gone to plan for Bitcoin bulls. Instead of seasonal strength, the price action has remained subdued with an early rally fizzling midway through the month, delivering an ugly reversal that may not be over yet, Forex.com analysts wrote in a note.
They also noted that Bitcoin was rapidly breaking down correlations with broader risk-driven markets, especially equities. Crypto markets faltered even as Wall Street indexes hit a series of record highs in recent weeks.
Forex.com analysts noted that Bitcoin was “lagging badly in an environment where so many high-beta markets are ripping higher.”
This trend remained squarely in play on Tuesday. Asian stock markets rallied sharply, with Japan hitting record highs on Sanae Takaichi’s progress towards becoming prime minister.
Chinese markets also surged as U.S. made conciliatory statements on an ongoing trade dispute. But Bitcoin and crypto prices dropped across the board during the Asian session.
Broader crypto prices also declined on Tuesday, tracking Bitcoin’s losses after a short-lived rebound.
World no.2 crypto Ether slipped 3.5% to $3,881.71, dropping to hold the coveted $4,000 level.
XRP dropped 1.1% to $2.42, taking little support from news of a new treasury backed by issuer Ripple Labs.