Bitcoin dips below $100K as DeFi losses spark crypto rout

Bitcoin plunged on Tuesday, slipping from its October record and briefly trading below the six figure mark on major exchanges as a broad crypto selloff accelerated across tokens and trading venues. The largest cryptocurrency traded in the low 100,000s for much of the U.S. session after declines that left it roughly 17 to 20 percent below early October highs, while other large coins including ether, XRP, BNB and Solana posted double digit weekly losses.

Traders and analysts pointed to a confluence of factors driving the move. A deepening crisis in decentralized finance weighed on sentiment after a major DeFi protocol disclosed roughly 93 million in fund asset losses and industry watchers estimated some 284 million in bad debt across lending markets. Those disclosures prompted fears of contagion, forced redemptions and margin liquidations in parts of the crypto ecosystem. At the same time, macroeconomic uncertainty—particularly a more hawkish tilt from U.S. monetary policymakers, a stronger U.S. dollar and the ongoing U.S. government shutdown—added pressure on risk assets.

Market liquidations escalated as leveraged positions were unwound, with liquidation trackers recording about...