Bitcoin drops 7% before paring some losses as rally stumbles

The news: Bitcoin has shown its first sign of weakness in more than two months after the original cryptocurrency suddenly dropped more than 7% after consolidating for multiple days below the USD45,000 ($68,700) mark.

The numbers: The volatile asset's value on Binance dropped from USD43,789.50 to as low as USD40,400 in less than three hours on Monday, but recovered to around USD42,110 by around 3pm AEDT. Bitcoin's price is up roughly 155% so far for the year after tanking 64% in 2022 in a year marred by regulatory pressures and the collapse of high-profile exchanges and platforms such as FTX and Celsius.

The context: Bitcoin and other cryptocurrencies have been rallying in recent weeks on the back of hopes US regulators could be close to approving a Blackrock Bitcoin exchange traded function (ETF). The asset's recent rally has tracked with a surge in broader markets like the S&P500, which is seen as a proxy for risk-on assets such as Bitcoin.