Bitcoin rebounded from near 10-month lows on Tuesday but remained under pressure below $80,000, following heavy sell-offs over the weekend and uncertainty surrounding U.S. monetary policy.
The world's largest cryptocurrency rose 2.8% to $78,558.4000 by 09:42 Saudi time.
Bitcoin had fallen to a low of $74,635.50 in the previous 24 hours, its lowest level since early April, as a series of stop-loss orders and margin calls accelerated the sell-off.
Bitcoin under pressure from large sell-offs and Trump's nomination to head the Federal Reserve
The sharp decline at the end of the week was driven by widespread liquidations of leveraged positions, highlighting the extent of speculative positions that had accumulated during last year's rally.
Data from derivatives tracking firms showed that several billion dollars of cryptocurrency bets were wiped out in a short period, with long positions accounting for the bulk of the forced closures.
Reports indicated that low liquidity exacerbated price volatility, allowing relatively small moves to trigger large-scale sell-offs.
Sentiment was also negatively impacted by macroeconomic uncertainty. Investors are assessing the implications of Kevin Warsh's nomination to head the US Federal Reserve, a move that has led to a reassessment of the future path of interest rates.
Warsh is widely seen as favoring a more hawkish policy stance, raising concerns that financial conditions could remain tighter for a longer period.
Meanwhile, the highly anticipated U.S. jobs report for January, which was due to be released on Friday, has been postponed due to the partial government shutdown, according to the Bureau of Labor Statistics.
No agreement on stablecoin returns at the White House cryptocurrency meeting
Media reports indicate that the cryptocurrency industry and major US banks remain far apart on how to regulate stablecoin returns following a White House meeting, highlighting the continuing obstacles to the long-stalled cryptocurrency legislation.
Executives from cryptocurrency companies, bank representatives, and government officials met in Washington to discuss market structure rules, but made little progress on whether stablecoin issuers should be allowed to offer interest-like returns, according to reports.
Banks have argued that stablecoins that offer returns can accelerate deposit flows and pose risks to financial stability, while cryptocurrency companies say such features are essential for growth and competitiveness.
Cryptocurrency prices today: Altcoins rebound; Polygon jumps 10%
Most alternative currencies also rebounded slightly on Tuesday.
Ethereum, the world's second-largest cryptocurrency, rose 4.6% to $2,325.9200.
XRP, the world's third-largest cryptocurrency, rose 2.1% to $1.6100.
Solana advanced by 3.5%, while Cardano jumped by 5% and Polygon rose by more than 10%.
Among the meme currencies, both Dogecoin and $TRUMP rose by 3.5%.
