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Bitcoin traded with limited direction on Tuesday, as subdued liquidity from holidays across several major markets curtailed trading activity, while investors remained cautious ahead of key U.S. economic data and upcoming diplomatic talks between the United States and Iran.
The world’s largest cryptocurrency slipped 0.5% to $68,056 by 00:39 ET (05:39 GMT), with overall sentiment restrained by a lack of clear near-term catalysts.
Prolonged Crypto Selloff Keeps Pressure on Bitcoin
Bitcoin has been struggling to recover from a steep and prolonged downturn. The cryptocurrency nearly fell below the $60,000 level last week, underscoring the depth of a broader selloff that has weighed on digital assets for several months.
Since reaching a record high in October, Bitcoin has erased nearly 50% of its value, reflecting a challenging environment for risk-sensitive assets. Recent losses were driven in part by concerns over the future direction of U.S. monetary policy following President Donald Trump’s nomination of Kevin Warsh as Chairman of the Federal Reserve. Warsh is widely perceived as less dovish, raising fears that monetary conditions may remain tighter than previously anticipated—an unfavorable backdrop for speculative assets such as cryptocurrencies.
Investor caution was further reinforced by anticipation of several high-impact U.S. data releases in the coming days, including industrial production figures, trade data, and the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge. Markets are also awaiting the minutes from the Fed’s January policy meeting, which could provide additional clarity on the central bank’s outlook.
Risk Aversion and Corporate Holdings in Focus
Broader risk aversion continued to weigh on crypto markets, as investors showed a preference for traditional safe-haven assets such as gold and other precious metals. Volatility in U.S. technology stocks—an asset class that often moves in tandem with cryptocurrencies—also spilled over into digital assets.
Bitcoin found little support from comments by Strategy Inc. (NASDAQ: MSTR), the largest corporate holder of Bitcoin, which stated it was positioned to withstand a price decline down to $8,000 per coin. Despite the reassurance, the company reported significant losses in the fourth quarter, and the recent drop in Bitcoin prices has reignited concerns over its debt exposure, part of which is linked to the valuation of its crypto holdings.
Strategy was not alone in facing valuation pressures. Japan-based Metaplanet Inc. (TYO: 3350), which has adopted Bitcoin as a treasury asset, disclosed an unrealized valuation loss of approximately 102.2 billion yen on its holdings amid the recent market downturn.
Altcoins See Modest Recovery
Elsewhere in the crypto market, prices edged slightly higher, recovering marginally from recent heavy losses. Ether, the second-largest cryptocurrency, rose 0.9% to $1,976.10, while XRP gained 1.4% to $1.4758. BNB, Solana, and Cardano advanced between 1.7% and 3%.
Memecoins underperformed the broader market, with Dogecoin falling 2.2%, while the $TRUMP token declined 3.7%, reflecting continued selective risk-taking among investors.
Overall, cryptocurrency markets remain fragile, with near-term direction likely to be dictated by U.S. macroeconomic signals, Federal Reserve guidance, and broader global risk sentiment.
