Bitcoin has wiped out its summer rally, giving back gains made during Wall Street’s euphoric embrace and a surge in institutional buying.
The original cryptocurrency fell as much as 7.4% to $96,794 on Tuesday in New York, the first time below $100,000 since June. That’s down more than 20% from a record high reached a month ago, a plunge consistent with a bear market in equities. Ether slipped as much as 15% and several so-called altcoins posted similar declines, bringing losses for many of the less easily traded and liquid tokens to more than 50% this year.
The turning point came in October, when a brutal wave of liquidations wiped out more billions in bullish positions. Since then, traders have stayed on the sidelines. Open interest in Bitcoin futures remains far below pre-crash levels, and even with funding costs turning favorable, few are willing to re-enter. The result: Bitcoin is up less than 10% this year, lagging equities and once again falling short as a portfolio hedge.
“Bitcoin’s decline to the June lows reflects a market structure still grappling with the psychological overhang from October’s massive liquidation event, which has fundamentally altered how participants engage with the prevailing downtrend,” said Chris Newhouse, director of research at Ergonia, a firm specialising in decentralised finance.
