Investing.com — Bitcoin prices fell on Tuesday, losing ground after a weekend rally as concerns over worsening geopolitical tensions around the world weighed on risk sentiment, as did anticipation of further economic signals.
The index fell 1.4% to $3,106.6 at 01:10 ET (05:10 GMT), tracking overnight declines in stock markets.
Trade jitters with China and rising oil prices weigh on confidence
Cryptocurrency losses followed broader losses in risk-driven markets as sentiment was hit by a range of geopolitical risks.
Canada has imposed new trade tariffs on China, following similar moves by Europe and the United States, sparking anger in Beijing. The move has raised fears of a new trade war with the West, which bodes ill for the world's largest economies.
A surge in oil prices also spooked markets as a ceasefire between Israel and Gaza showed little sign of materializing, while a dispute in Libya over the leadership of the central bank saw all oil production in the country halted.
Heightened geopolitical risks offset recent enthusiasm over lower US interest rates, leading to losses in the stock and cryptocurrency markets. Gold saw some safe-haven demand, as did gold, which rebounded from 13-month lows.
Bets on rate cuts remain in place
But Bitcoin still held on to most of the gains it made over the weekend as dovish comments from the Federal Reserve cemented expectations of an interest rate cut in September.
Traders were divided on a 25- or 50-basis-point cut, he said.
The prospect of lower rates bodes well for speculative assets like cryptocurrencies, as it frees up more liquidity that can be invested in the sector. This notion was a major driver of crypto’s rally in 2021.
Bitcoin was also supported by some expectations of a friendlier regulatory environment in the US, after independent presidential candidate Robert F Kennedy Jr suspended his campaign and endorsed Republican front-runner Donald Trump, who is also running on a pro-cryptocurrency platform.
Trump has held a much more favorable stance on cryptocurrencies than Democratic candidate Kamala Harris, fueling bets that a Trump presidency will bring friendlier regulation.
Cryptocurrency price today: Altcoins follow Bitcoin's losses
Among the broader cryptocurrency markets, altcoin prices also retreated on Tuesday, falling in tandem with Bitcoin.
The world's No. 2 token fell 1.9% to $2,698.0.
and moved in a flat to low range, while losing 1.5%.
Among meme tokens, it fell by 2.4%.
