Bitcoin Plunges Below $64,000 as Risk-Off Sentiment Grips Markets

Bitcoin's price dropped below $64,000 on Tuesday as risk-off sentiment gripped markets. The correction comes after losses of over 2.5% the previous day, with institutional demand showing early signs of weakness.

A decline in global risk sentiment was triggered by a sell-off in semiconductor shares following reports that China had developed competitive domestic deep ultraviolet (DUV) lithography technology. This led to a widespread sell-off in tech stocks and other risk assets, including cryptocurrencies.

Nicolai Sondergaard, Senior Research Analyst at Nansen, noted that the decline in Bitcoin's price is also being driven by crypto-native headwinds, including a sharp drop in stablecoin exchange inflow velocity and outflows from spot Bitcoin ETFs.