Bitcoin Plunges Below $89K Amid Tech Stock Slump and Yen Surge

The cryptocurrency market experienced a significant downturn on Tuesday, with Bitcoin falling below the $89,000 mark during the European session. This decline can be attributed to a combination of factors, including the continued decline in tech stocks and the strengthening of the Japanese Yen.

Data from CoinDesk indicates that Bitcoin dropped to a low of $88,500, its highest level since mid-November. This decline comes amidst a broader trend of falling tech stocks, with Nasdaq futures falling by 0.3% and the tech stock index having fallen by over 4% since February 18th.

The safe-haven currency Japanese Yen to US Dollar exchange rate is currently at 149.38, poised to challenge Monday's nearly three-month high of 148.84. The market is betting on the Bank of Japan raising interest rates, which has led to the Yen rising by almost 6% in six weeks.

The Bank of Japan's interest rate hike comments and the strengthening Yen have echoes of the situation in July, when the central bank's rate hike led to a surge in the Yen. This, in turn, triggered widespread risk-off sentiment, leading to Bitcoin plunging from around $65,000 to $50,000 within a few days.