New York (TDI): Bitcoin fell sharply on Tuesday, dropping more than 6% and slipping below $100,000 for the first time since June.
This marked the cryptocurrency’s biggest decline in months, triggered by a broader risk-off sentiment that affected global financial markets.
The fall in Bitcoin came as major US stock indexes also saw significant losses. Technology and semiconductor stocks, in particular, were hit hard, following warnings from the CEOs of Goldman Sachs and Morgan Stanley that a pullback in equity markets could be imminent. These cautionary statements added to the overall market unease, leading to declines in both stocks and risk assets, including cryptocurrencies.
With the risk-off mood dominating the markets, US Treasury yields fell while the US dollar strengthened to a four-month high against the euro, further pressuring risk assets. The stronger dollar and growing investor caution are reflective of tightening monetary conditions and ongoing market volatility.
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In the stock market, tech stocks took a major hit. Shares of Nvidia dropped 4%, while a broader semiconductor index also saw a 4% decline. Palantir Technologies, despite reporting strong quarterly results and a bullish forecast for the fourth quarter, saw its stock fall by more than 8%, Reuters reported.
The broader stock indices also saw significant losses. The S&P 500 dropped by more than 1%, and the Nasdaq lost over 2%, though it remains up approximately 21% for the year so far. The Dow Jones Industrial Average lost 0.53%, while the MSCI global stock index dropped 1.14%.
The cautious mood in the markets was partly driven by concerns over US Federal Reserve policy. The US dollar remained supported by reduced expectations for a near-term rate cut, especially after Fed Chair Jerome Powell indicated last week that a rate reduction in December was not certain. The CME FedWatch tool now shows a 65% chance of a rate cut in December, down from 94% just a week ago.
On the currency front, the euro continued its slide, falling for the fifth consecutive session, dropping 0.3% to $1.148, its weakest level since early August. The yen also weakened against the dollar, though it remained near a recent eight-and-a-half-month low. Meanwhile, the British pound tumbled 0.72% following concerns raised by the UK’s finance minister about upcoming budgetary challenges.
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US Treasury yields declined in the wake of the broader risk-off sentiment. The yield on the 10-year US Treasury note fell 2 basis points to 4.087%, from 4.107% the previous day.
In the commodities market, oil prices also saw a decline. US crude oil settled at $60.56 per barrel, while Brent crude fell to $64.44 per barrel, both pressured by the stronger dollar.
This widespread market turbulence underscores growing investor unease and signals a cautious outlook for both traditional and digital assets as uncertainty continues to cloud global financial markets.
