Bitcoin Sinks Below $89K as Global Markets Turn Risk-Averse, Yen Rally Sparks Concern
Bitcoin (BTC) tumbled below $89,000 on Tuesday, reaching its lowest level in three months as risk aversion intensified across global markets. A continued sell-off in tech stocks, coupled with a surging Japanese yen, fueled investor unease, mirroring past instances of financial instability.
BTC fell to $87,000, marking a fresh low since mid-November, according to CoinDesk data. Broader crypto markets followed suit—Ether (ETH) slumped 9% to $2,400, Solana’s SOL plunged 14% (bringing its weekly losses past 20%), and Dogecoin (DOGE) and XRP (XRP) each slid 11%. The CoinDesk 20 Index (CD20), tracking major crypto assets, dropped 7%.
Despite recent pro-crypto rhetoric from former U.S. President Donald Trump, political uncertainty remains. “The rejection of Bitcoin reserve proposals in Montana, North Dakota, and Wyoming highlights the reluctance of policymakers to embrace state-backed crypto holdings,” said Valentin Fournier, analyst at BRN. “There’s still hesitation around integrating Bitcoin into government reserves due to the volatility and political risks involved.”
Fournier suggested that if Bitcoin were to be adopted as part of national reserves, it would likely require structured backing, such as a bond issuance or a reallocation of U.S. gold holdings.
Bitcoin’s decline aligns with a broader contraction in global liquidity. “The drop in BTC seems to lag behind global money supply trends. Since liquidity has recently bottomed out, this could indicate that Bitcoin’s weakness may not persist for long,” observed Andre Dragosch, head of European research at Biwise.
Macro factors continue to weigh on investor sentiment. Nasdaq futures slipped another 0.3% early Tuesday, extending a three-day slide that has erased over 4% from the index since February 18.
Meanwhile, the Japanese yen surged to 149.38 per U.S. dollar, nearing Monday’s three-month high of 148.84. The yen has appreciated nearly 6% in six weeks amid growing speculation that the Bank of Japan (BOJ) will hike interest rates. The situation is reminiscent of last July, when a yen rally triggered a widespread market sell-off, sending Bitcoin from $65,000 to $50,000 in a matter of days.
“Historically, a strong yen often signals broader market risk-off sentiment, which doesn’t bode well for speculative assets like Bitcoin,” said Joseph Wang, operator of research portal FedGuy.com.
