Bitcoin reverses early gains, drops below $88,000 as Nasdaq futures wilt

Bitcoin BTC$87,884.53 reversed gains made earlier in Asia, puncturing nascent recovery rallies in major alternative cryptocurrencies.

The leading cryptocurrency by market value dropped below $88,000, having peeped above $90,000, CoinDesk data show. Major altcoins including XRP$1.9003, ether ETH$3,017.33, solana SOL$127.81 and DOGE$0.1269 also retraced their adances. The CoinDesk 20 Index (CD20) pulled back to 2,726, roughly where it was in early Asia before it popped to 2,789.

The decline is consistent with weakness in stock index futures. As of writing, futures tied to Wall Street’s tech-heavy Nasdaq 100 Index traded 0.5% lower on the day, pointing to a cautious start to trading.

BTC and the Nasdaq share a strong positive correlation that becomes more pronounced during Nasdaq downtrends, according to Wintermute.

The pullback led traders to slightly scale back their leveraged bets. Data from Coinglass shows that cumulative open interest in futures listed worldwide declined to around 533,000 BTC from the 540,000 BTC seen earlier today. Open interest had popped from 524,000 BTC as the bitcoin price rose to $90,000.

The cryptocurrency has recently tended to underperform during U.S. hours, according to Laser Digital.

“An interesting trend to take note of has been the distinct underperformance during the US timezone. (both BTC, ETH down 3%+ over US hours [last week] offset by strength during Asian hours) driven most likely by selling pressure coming from the year-end tax harvesting flow as crypto has been a large underperformer among global assets this year,” analysts at Laser Digital wrote in an analysis note Monday.

John Glover, an Elliott wave expert and chief investment officer at crypto lender Ledn, signaled a bullish outlook.

“The Bitcoin price chart looks very promising for higher prices in the future, but less certainty in the near term. I continue to look for the market to trade sideways to slightly lower in the coming weeks/months, and look to add to longs between $71k and $84k,” Glover told CoinDesk in an email.