Bitcoin (BTC) Dips Below $89K as Nasdaq Futures Point to Continued Losses in Technology Stocks

The leading cryptocurrency hit a low of $88,500, a level last seen in mid-November, CoinDesk data shows.

Bitcoin (BTC) dipped below $89,000 during Tuesday's early European hours as Nasdaq futures pointed to continued losses in technology stocks and strength in the Japanese yen sparked fears of an August-like risk aversion.

The leading cryptocurrency hit a low of $88,500, a level last seen in mid-November, CoinDesk data shows. The losses follow recent reluctance to adopt state-managed bitcoin reserves in the U.S.

Three state-level proposals for bitcoin reserves failed in Montana, North Dakota and Wyoming. The reluctance to adopt state-run bitcoin reserves underscores the political risks, as policymakers might be avoiding accusations of speculating with taxpayer funds, according to Valentin Fournier, an analyst at BRN.

“A nationwide reserve strategy – potentially backed by a bond issuance or a partial sale of U.S. gold reserves – could be a more viable path for future adoption,” Fournier said.

Some observers are linking BTC's weakness to the decline in the global money supply early this year.

“There appears to be a lag between global money supply and BTC,” Andre Dragosch, head of research Europe - Biwise, said on X, noting the BTC price drop.

Note that the money supply has bottomed out recently, which could mean that BTC's price weakness might not last for long.

For now, the focus is on traditional markets, which are giving off risk-off vibes. Nasdaq futures dipped 0.3% early Tuesday, signaling an extension of a three-day losing streak. The tech-heavy index has dropped over 4% since Feb. 18.

The anti-risk Japanese yen traded at 149.38 per USD and looked set to challenge the near three-month high of 148.84 hit Monday. The JPY has strengthened nearly 6% in six weeks on bets that the Bank of Japan (BOJ) will raise rates.

The BOJ rate hike talk and the yen strength has revived memories of July when the yen surged on the central bank's rate hike, eventually leading to a broad-based risk aversion that saw bitcoin crash from roughly $65,000 to $50,000 within days.

“Massive Yen strengthening - sometimes occurs with big risk off,” Joseph Wang, operator of the research portal fedguy.com, said last week.