Bitcoin prices fell 13.2% to $ 8,588.4 by 12:10 ET (04:10 GMT). The crypto king dropped 21% to $ 8,090.6 in the previous session. That was the biggest drop in a day since January 2018.
Potential catalysts for the slump included the lackluster launch of the highly anticipated Bitcoin futures and general risk sentiment.
The decline took place after the Bitcoin network hash rate, the computing power of the miners, had fallen overnight by 40%, according to reports.
"Price action is currently fueled by short-term technical analysis, as every lower price provokes a rebound in bitcoin and any high price reached is a drag," said Jeff Dorman, chief investment officer at Arca, in an interview with Bloomberg. "With crypto still dominated by short-term traders, these remote-controlled portrayals often become self-fulfilling prophecies."
"There were certainly some drawbacks related to Bakk's 'disappointing' start, but expectations were unrealistic anyway," said Dorman. "It's much better for Bakkt to start slowly with the customers onboard and grow over time than go out with glowing guns and then lie flat 2 months later."
Weakening investor sentiment and falling equity markets also reportedly put pressure on Bitcoin. Wall Street fell overnight, while today's Asian markets were mostly in the loss, while in the US political worries and worsening trade disputes between the US and China were observed.
Other important cryptocurrency prices also collapsed today. Litecoin lost 18% to $ 56,724. On Tuesday it came with 21.1% to the largest percentage of daily loss since 2017.
Ethereum fell 18.6% to $ 169.92. The XRP fell 11.5% to $ 0.24024.