Bitcoin plunged below $90,000 on Tuesday for the first time in seven months, erasing all 2025 gains and signalling a sharp reversal in investor sentiment after a prolonged rally, as traders brace for potential U.S. interest rate hikes and broader market jitters.
The cryptocurrency, which peaked above $126,000 in October, dipped 1 percent to $90,907.51 in early European trading after touching a low of $89,286.75, according to market data. The slide has wiped nearly $1.2 trillion from the total value of all cryptocurrencies over the past six weeks, with Ether shedding almost 40 percent from its August high above $4,955.
Analysts pointed to waning optimism over U.S. Federal Reserve rate cuts and a risk-off mood in global equities, exacerbated by an overvalued tech sector, as key drivers. Crypto-heavy stocks like MicroStrategy, Riot Platforms, Mara Holdings and Coinbase also tumbled in sympathy.
Joshua Chu, co-chair of the Hong Kong Web3 Association, warned of cascading effects, saying: “The cascading selloff is amplified by listed companies and institutions exiting their positions after piling in during the rally, compounding contagion risks across the market. When support thins and macro uncertainty rises, confidence can erode with remarkable speed.”
Joseph Edwards at Enigma Securities attributed the timing to vulnerability, noting: “The sell pressure here isn’t extraordinary, but it’s coming at a relative weak point on the buy side … a lot of retail buyers were stung during the flash crash last month,” referencing October’s $19 billion liquidation wave.
Matthew Dibb, chief investment officer at Astronaut Capital, captured the gloom, stating: “All in all sentiment is pretty low in crypto and has been since the leverage wipeout of October.”
