Bitcoin Drops Below $89K as Market Jitters Grow, Strengthening Yen Fuels Risk-Off Sentiment

Bitcoin (BTC) slipped under $89,000 on Tuesday, hitting a three-month low as risk aversion gripped global markets. Losses in Nasdaq futures signaled further weakness in tech stocks, while a strengthening Japanese yen stoked fears of broader financial instability, echoing past periods of market turbulence.

The leading cryptocurrency fell as low as $87,000, its lowest level since mid-November, according to CoinDesk data. The downturn extended across the crypto sector, with Ether (ETH) plunging 9% to $2,400, Solana’s SOL shedding 14%—deepening its weekly decline to over 20%—and Dogecoin (DOGE) and XRP (XRP) dropping 11%. The CoinDesk 20 Index (CD20), which tracks major digital assets, sank 7%.

“While Donald Trump has recently voiced support for Bitcoin, failed state-level proposals for Bitcoin reserves in Montana, North Dakota, and Wyoming highlight political hesitancy,” said Valentin Fournier, analyst at BRN. “Lawmakers remain wary of appearing to gamble with taxpayer funds, which could slow efforts for wider institutional adoption.”

Fournier suggested that Bitcoin reserves might be more feasible at the national level, possibly backed by a government bond issuance or reallocating a portion of U.S. gold reserves.

Bitcoin’s slide is also aligning with a broader contraction in global liquidity. “There’s typically a lag between changes in money supply and BTC price action. With liquidity bottoming out recently, this sell-off might not last long,” noted Andre Dragosch, head of European research at Biwise.

Macroeconomic factors continue to pressure risk assets. Nasdaq futures fell 0.3% early Tuesday, extending a three-day slide that has erased over 4% from the index since Feb. 18.

Meanwhile, the Japanese yen strengthened to 149.38 per U.S. dollar, nearing Monday’s three-month high of 148.84. The yen has gained nearly 6% in six weeks amid expectations of a Bank of Japan (BOJ) rate hike. The situation mirrors last July’s yen rally, which coincided with a major Bitcoin sell-off that drove prices from $65,000 to $50,000 in days.

“Historically, rapid yen appreciation often signals global risk-off moves, which tend to hurt assets like Bitcoin,” said Joseph Wang, operator of research portal FedGuy.com.