Bitcoin drops as China-U.S. trade relations cool

The world’s largest crypto was nursing steep losses through October, having largely lagged broader risk assets after a flash crash in the beginning of the month

Bitcoin dropped on Monday, remaining on the backfoot after logging its first October loss since 2018, as caution over a cooling economy and China-U.S. trade relations kept risk appetite largely on the backfoot.

The world’s largest crypto was nursing steep losses through October, having largely lagged broader risk assets after a flash crash in the beginning of the month. Bitcoin dropped 2.4% to $107,914.5 by 05:17 GMT.

Bitcoin shed some 5% in October, its first loss during the historically bullish month since 2018.

Bitcoin and crypto markets’ tendency to outperform in October had led to the creation of the term ‘uptober,’ although the trend failed to materialize this year.

Sentiment towards crypto markets was battered by a flash-crash in early-October, which had dragged Bitcoin as low as $104,000.

The world’s largest crypto, along with its peers, had largely lagged other risk-driven markets in recovering from early-October losses.

A recent U.S.-China trade deal did little to lift crypto prices, with hawkish signals from the U.S. central bank also providing pressure.

The difference between Bitcoin prices on Coinbase Global Inc and the global market average turned negative in late-October, Coinglass data showed.

Bitcoin on Coinbase usually trades at a premium to the global average, at least in times of strong U.S. retail sentiment and crypto demand. Coinbase is a leading U.S. exchange, and is one of the biggest marketplaces for investors to purchase crypto.

But this premium turned negative in late-October, indicating that U.S. retail and institutional sentiment towards crypto remained largely subdued.

The negative coinbase premium also coincided with crypto exchange-traded fund flows turning negative in the US.

A negative Coinbase premium usually signals weak market demand and more selling pressure on the world’s largest crypto. Historically, a negative premium is only seen during extended periods of price weakness in crypto.

Broader crypto prices dropped tracking Bitcoin, with most altcoins also nursing steep losses in October.