Key Moments:

• Bitcoin dropped to $100,502 before rebounding past the $103,800 mark.
• Arizona Governor vetoed key crypto legislation while enacting tighter restrictions on Bitcoin ATMs.
• Liquidations involving over $200 million in Bitcoin futures have been observed.

Bitcoin Gains Ground

Bitcoin started out Tuesday with a retreat, falling to $100,502 as investors trimmed positions in anticipation of critical US inflation data. BTC experienced declines over the past 24 hours before managing to recover and climb 1% to $103,838.

These price movements follow yesterday’s bullish momentum, when Bitcoin surged past $105,000 after Chinese and US officials announced a 115% tariff reduction. However, the rally destabilized as traders became cautious ahead of the Consumer Price Index (CPI) report, which may impact the Federal Reserve’s next move when it comes to monetary policy.

Sell-Offs and Derivative Liquidations

Analytics platform Santiment indicated that many Bitcoin holders were locking in gains after the recent rally. According to the Network Realized Profit/Loss (NPL) metric, which measures aggregate daily Return On Investment (ROI) from on-chain transactions, holders were selling into strength.

As Bitcoin prices fluctuated, the crypto derivatives market saw significant volatility. Roughly $700 million in leveraged crypto positions were liquidated, with Bitcoin futures accounting for more than $200 million of those losses.

Arizona Tightens Crypto Rules

Meanwhile, market sentiment faced pressure from regulatory developments in Arizona. Governor Katie Hobbs vetoed two pieces of crypto legislation. The first bill, SB 1373, proposed establishing a Digital Assets Strategic Reserve Fund, while bill SB 1025 suggested allocating up to 10% of the state’s treasury and pension funds to Bitcoin investments.

Governor Hobbs also deemed a separate measure, which would have allowed tax payments in cryptocurrency, as too risky and thus rejected it. However, she did sign HB 2387, a bill introducing new regulations for Bitcoin ATMs across the state. This piece of legislation limits new users to $2,000 in daily transactions, but the cap is increased to $10,500 after 10 days. Mandatory multilingual scam risk disclosures, comprehensive receipts, and around-the-clock customer service will be mandated, and victims of fraud will be entitled to full refunds if they report the incident within 30 days.