The dip comes amid doubts about future US interest rate cuts and a risk-averse mood in broader markets.

Bitcoin fell below $90,000 for the first time in seven months in the latest sign that investor appetite for risk is drying up across financial markets.

The cryptocurrency began to rebound as United States markets opened on Tuesday. However, Monday’s steep drop in the risk-sensitive asset had already wiped out all of its gains for the year.

It is now nearly 30 percent below its peak of $126,000 in October.

It was down 0.5 percent at $91,338.47 during European trading hours, after slipping as low as $89,286.75.

About $1.2 trillion has been wiped off the total market value of all cryptocurrencies in the past six weeks, according to market tracker CoinGecko.

Market participants said that a combination of doubts around future interest rate cuts by the US Federal Reserve and the risk-averse mood in broader markets, which have wobbled after a long rally, was dragging down crypto.

“The cascading selloff is amplified by listed companies and institutions exiting their positions after piling in during the rally, compounding contagion risks across the market,” said Joshua Chu, co-chair of the Hong Kong Web3 Association.

“When support thins and macro uncertainty rises, confidence can erode with remarkable speed.”

Speculators who had put money into crypto in the hopes of supportive US regulation have started to pull back, causing steady outflows from exchange traded funds (ETFs) and similar instruments in recent weeks, said Joseph Edwards at Enigma Securities.

“The sell pressure here isn’t extraordinary, but it’s coming at a relative weak point on the buy side … a lot of retail buyers were stung during the flash crash last month,” he said, referring to an October crash in which there were $19bn in liquidations across leveraged positions.

Crypto stockpilers such as Strategy, miners such Riot Platforms and Mara Holdings, and exchange Coinbase have all slid with the souring mood.

‘Underwater’

There has been a boom in public crypto treasury companies this year, with small companies in unrelated sectors becoming crypto proxies by announcing plans to buy and hold cryptocurrencies on their balance sheets.

But Standard Chartered has estimated that a drop below $90,000 for Bitcoin could leave half of these companies’ Bitcoin holdings “underwater” – a term that typically refers to assets worth less than what was paid for them.

Listed companies collectively hold 4 percent of all the Bitcoin in circulation, and 3.1 percent of the ether, Standard Chartered said.

The cryptocurrency Ethereum (ETH) has also been under pressure for months, and has lost nearly 40 percent of its value from an August peak above $4,955.

“All in all, sentiment is pretty low in crypto and has been since the leverage wipeout of October,” said Matthew Dibb, chief investment officer at Astronaut Capital.