Bitcoin Slumps to Three-Month Low Amid Yen Surge and Risk Aversion

Bitcoin's price plummeted to a three-month low of $88,500 on Tuesday, marking its lowest level since mid-November. This significant drop coincides with deteriorating global risk sentiment and increased selling pressure in the cryptocurrency market.

The decline has been attributed to several factors, including technology stocks continuing their downward trajectory and the strengthening Japanese yen sparking concerns about broader market stability. The yen's surge to a three-month high of 149.38 against the US dollar has evoked memories of last summer's market turmoil when a similar increase in the currency led to widespread risk aversion.

Market observers, such as Andre Dragosch, head of research Europe at Bitwise, point out that there appears to be a lag between global money supply and BTC. Dragosch suggests that the recent contraction in money supply may have contributed to Bitcoin's price swoon, but notes that the bottoming out of money supply could potentially lead to a reversal in price.