Bitcoin briefly tumbled below the $100,000 threshold on Tuesday, marking its lowest point in over four months, as worries mounted over stretched equity valuations powered by the artificial intelligence sector.
The world’s leading cryptocurrency shed more than 6% and briefly touched levels not seen since June. The sell-off comes as market participants expressed heightened anxiety over the potential U.S. government shutdown and an apparent slowdown in economic growth.
Bitcoin has now retreated about 20% from its record peak above $126,000 reached in early October. By Wednesday, the token managed to stabilize somewhat, recovering 1.7% to trade at $102,093.
According to Sean Farrell, Fundstrat’s head of digital assets, the number of investors with significant crypto holdings has increased in recent weeks, setting the stage for heightened volatility and downward pressure in the digital asset market.
In the past 24 hours, roughly $2.09 billion in crypto positions were liquidated, based on data from CoinGlass. Of that figure, $1.68 billion stemmed from long positions. While this is well below the record $19 billion wiped out during October’s market rout, traders have responded by adopting a more cautious stance.
Ethereum also faced heavy losses, with the second-largest token dropping over 12% to $3,179.
