Bitcoin was flat on Tuesday with little movement in the cryptocurrency markets as holidays in many major markets made it difficult to find live trading signals.
Caution was also raised ahead of key US economic readings, as well as in anticipation of upcoming talks between the United States and Iran.
Bitcoin fell 0.5% to $68,056.0 by 8:39 AM Saudi time.
Bitcoin suffers sharp losses amid a prolonged cryptocurrency meltdown
Bitcoin nearly fell below $60,000 last week, as the world's largest cryptocurrency spearheaded a broader sell-off in the sector that has lasted for months.
The cryptocurrency has now erased nearly 50% of its value since hitting a record high in October, amid a storm of headwinds for the sector.
The recent losses in Bitcoin came amid market concerns about the outlook for US monetary policy under Kevin Warsh, President Donald Trump's nominee for Federal Reserve chairman.
Warsh was deemed a less lenient choice, raising concerns that US monetary conditions would not be as flexible as initially anticipated - a scenario that does not bode well for speculative assets such as cryptocurrencies.
On the US economic front, data on industrial production, trade, and the personal consumption expenditures price index – the Federal Reserve's preferred inflation measure – are due to be released in the coming days.
The minutes of the Federal Reserve meeting in January will also be released this week.
The aversion to broader risks has also led traders to favor physical assets such as gold and precious metals over cryptocurrencies, while volatility in US technology stocks – which cryptocurrencies tend to track – has also spilled over into the sector.
Bitcoin received little support from its largest institutional owner, Strategy Inc (NASDAQ:MSTR), which stated that it was well-positioned to survive a price collapse to $8,000 per coin.
But the company was also suffering a large loss in the fourth quarter, while the recent drop in Bitcoin has raised concerns about the company's debt - some of which is tied to the value of its Bitcoin holdings.
Strategy wasn't the only Bitcoin treasury to suffer significant losses in recent weeks. Japanese hotel company Metaplanet Inc. (TYO:3350), which had become a treasury, recorded a valuation loss of approximately 102.2 billion yen on its holdings.
Cryptocurrency prices today: Altcoins recover slightly from recent losses
Prices for the broader cryptocurrency market rose slightly on Tuesday, recovering marginally from recent losses, but still suffering from sharp declines in recent weeks.
Ether, the world's second-largest cryptocurrency, rose 0.9% to $1,976.10, while XRP climbed 1.4% to $1.4758.
BNB, Solana and Cardano rose by percentages ranging between 1.7% and 3%.
Meme currencies lagged behind, with Dogecoin down 2.2% and $TRUMP down 3.7%.
