Just a day after surging to a $126,198.07 record, bitcoin fell back to $121K on Tuesday, shedding roughly 4% of its peak value as mounting concerns over the U.S. government shutdown, now on its seventh day, appeared to spook investors.
Senate Republicans and Democrats once again failed to agree on the best short-term funding approach required to keep the federal machinery running after the government exhausted its fiscal resources last week Wednesday. Democrats rejected the temporary spending bill to fund the government until November 21, proposed by Republicans yesterday.
Other factors also played a role in bitcoin’s retreat, among them profit taking by investors who may have felt the cryptocurrency was approaching a blow off top. Data from Glassnode shows roughly 99.79% of bitcoin supply was sitting in profitable territory yesterday. Today, that number inched down to 99.29%.
(Gold topped $4,000 per ounce for the first time ever on Tuesday as investors flee treasuries and perhaps even bitcoin, in favor of bullion / Trading View)
Perhaps shrewd investors decided to diversify their holdings by moving capital from BTC to gold. The precious metal soared to $4,000 per ounce for the first time ever today. But either way, the overarching catalyst for all these moves is likely a drop in confidence in the U.S. government, which at this point cannot even provide jobs data required by its central bank to set interest rate policy at the end of the month.
Bitcoin was priced at $121,288.44 at the time of writing, down 3.5% for the day but still up 7.19% on a weekly basis, according to data from Coinmarketcap. The cryptocurrency reached a low of $120,941.32 less than 24 hours after surging to a fresh high of $126,198.07.
( BTC price / Trading View)
Twenty-four-hour trading volume jumped 22.18% to $79.15 billion, but market capitalization fell to $2.42 trillion, a 3.22% decrease. Bitcoin dominance also dipped slightly by 0.06% and now sits at 58.86%.
( BTC dominance / Trading View)
Total bitcoin futures open interest tumbled 3.75% to $91.90 billion, according to data from Coinglass. Bitcoin liquidations, however, jumped to $151.31 million as bulls with leveraged long positions suffered $111.45 million in liquidations. Shorts completed the liquidation picture with a smaller $39.87 million of margin wiped out.
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