Investing.com– Bitcoin fell on Tuesday, losing value after a weekend rally, as concerns about worsening geopolitical tensions around the world weighed on risk sentiment and expectations for more economic signals.

By 01:10 ET (05:10 GMT), it was down 1.4% at $3,106.6, reflecting overnight declines in stock markets.

Trade unrest in China, rising oil prices drag down sentiment

Losses in the cryptocurrency market came on the heels of wider losses in risk-on markets as sentiment soured on a range of geopolitical risks.

Canada imposed fresh trade tariffs on China, following similar measures in Europe and the U.S., angering Beijing. The move has fueled fears of a renewed trade war with the West that bodes ill for the world’s largest economies.

A surge in oil prices also spooked markets as there was no sign that a ceasefire between Israel and Gaza would materialize, while a dispute in Libya over the leadership of the central bank led to a complete halt in the country’s oil production.

Increased geopolitical risks have offset recent enthusiasm for lower U.S. interest rates, driving losses across stocks and cryptocurrencies. Gold saw some safe-haven demand, as did , which rebounded from 13-month lows.

Interest rate cut bets remain in play

However, bitcoin still held on to most of the gains made over the weekend, with dovish comments from the Federal Reserve fueling expectations for a rate cut in September.

Traders were divided on a 25 or 50 basis point cut, it said.

The prospect of lower interest rates bodes well for speculative assets like cryptocurrencies, as it frees up more liquidity that can be invested in the sector. This concept has been a key driver of the cryptocurrency bull market in 2021.

Bitcoin has also been supported by some expectations of a more favorable regulatory environment in the U.S. after independent presidential candidate Robert F. Kennedy Jr. suspended his campaign and endorsed Republican front-runner Donald Trump, who is also campaigning on a pro-cryptocurrency platform.

Trump has maintained a much more favorable stance on cryptocurrencies than Democratic candidate Kamala Harris, raising concerns that a Trump presidency will bring more amiable regulation.

Cryptocurrency Price Today: Altcoins Track Bitcoin’s Losses

In the broader cryptocurrency market, altcoin prices also fell on Tuesday, falling at the same pace as bitcoin prices.

The world’s second-largest token fell 1.9% to $2,698.0.

and traded flat to low, losing 1.5% in the process.

Among meme tokens, the decline was 2.4%.