Bitcoin staged a modest rebound on Tuesday after sliding to near 10-month lows, but the price remained capped below the $80,000 level. Heavy liquidations over the weekend and lingering uncertainty around U.S. monetary policy continued to weigh on market sentiment.
The world’s largest cryptocurrency was last trading 2.8% higher at $78,558.4 by 01:42 ET (06:42 GMT).
Bitcoin had dropped as low as $74,635.5 over the previous 24 hours, marking its weakest level since early April. The sharp move lower was driven by a wave of stop-loss triggers and margin calls that accelerated the sell-off.
Bitcoin pressured by liquidations and Fed uncertainty
The steep weekend decline was largely fueled by forced liquidations of leveraged positions, underscoring how much speculative exposure had accumulated during last year’s rally. Data from crypto derivatives trackers showed that several billion dollars worth of positions were wiped out in a short period, with long trades accounting for most of the closures.
Thin market liquidity also amplified volatility, allowing relatively small price moves to trigger outsized liquidations, according to market reports.
Investor sentiment has additionally been dampened by macroeconomic uncertainty. Markets are reassessing the outlook for interest rates following the nomination of Kevin Warsh as the next chair of the Federal Reserve.
Warsh is widely regarded as favoring a more hawkish policy stance, raising concerns that tighter financial conditions could persist for longer than previously expected.
Adding to uncertainty, the release of January’s closely watched U.S. employment report has been delayed due to a partial government shutdown, according to the Bureau of Labor Statistics.
Stablecoin yield talks stall in Washington
Regulatory uncertainty remains another headwind for the crypto sector. Media reports said the cryptocurrency industry and major U.S. banks remain divided over whether stablecoin issuers should be allowed to offer yield-like returns.
Executives from crypto firms, banking institutions, and government agencies met at the White House to discuss market structure rules. However, little progress was made on resolving disagreements around stablecoin yields.
Banks argue that yield-bearing stablecoins could accelerate deposit outflows and pose risks to financial stability. Crypto companies, on the other hand, say such features are essential for innovation and long-term competitiveness.
Altcoins rebound as Polygon surges
Despite Bitcoin’s struggles, most major altcoins posted gains on Tuesday.
Ethereum rose 4.6% to $2,325.92, while XRP advanced 2.1% to $1.61. Solana climbed 3.5%, Cardano jumped 5%, and Polygon surged more than 10%.
Among meme tokens, both Dogecoin and $TRUMP were up around 3.5%.
