Bitcoin pares early losses, but still trades in the red for session

The crypto meltdown on Tuesday steadied somewhat with most major coins paring steep, early losses.

The price of a single bitcoin,














BTCUSD, -2.12%












the world’s largest cryptocurrency, was last at $4,736.46, down 1.7% since 5 p.m. Eastern Time on the Kraken crypto exchange. Earlier in the session, bitcoin traded to $4,222.20, down more than 10% on the day, and 23% since the start of the trading week.

The total value of all cryptocurrencies has slumped to a 13-month low below $150 billion, according to data from CoinMarketCap.

Justice Department investigating Bitfinex and Tether: report

The Justice Department has intensified its probe into crypto exchange Bitfinex and Tether, a prominent stablecoin, which some allege is artificially inflated, according to reports, including one from Bloomberg.

The report comes after a University of Texas study linked issuance of Tether with increases in the price of bitcoin. In fact, this morning, a prominent Bitfinex skeptic Twitter user noted that the price of bitcoin jumped after an injection of $50 million worth of Tether.

Bloomberg had previously reported that the Commodity Futures Trading Commission was investigating both Tether and Bitfinex and had requested documents and material from the entities.

Read: Pressure mounts on Tether as stablecoin proves not so stable

What are the analysts saying?

Despite psychological support at the $6,000 level holding for a prolonged period, the lack of a bounce should have been a red flag for bitcoin bulls, one analyst said.

“Enthusiasts may have looked at bitcoin’s ability to hold above $6,000 as a sign of a market bottoming, but the warning signs were there each time it failed to make a new high on a rebound—most notably in March, May, July and even September,” wrote Craig Erlam, senior market analyst at Oanda.

“It’s always difficult to say where the market could stabilize again in such a wild market, but $3,000 looks an interesting level. This time last year, the sky was the limit for bitcoin and all the altcoins that piggybacked a ride, this year the ground below is looking very unsteady,” he wrote.

Read: Opinion: Bitcoin still fooling buyers into believing those 200%-plus gains are coming back

Ether surrenders second spot in digital asset ranks

Altcoins, those more than 2,000 coins other than bitcoin, also cut early losses. Ether,














ETHUSD, -3.88%












which has slipped to third on the list of largest digital assets by total value, is down 3.8% at $141.85, Litecoin














LTCUSD, -3.24%












was down 2.6% at $35.14, Bitcoin Cash was up 2.2% to $263.50 and XRP,














XRPUSD, -8.22%












was down 7.2% at 45 cents.

Bitcoin futures have tracked spot prices back higher after early losses. The Cboe Global Markets December contract














XBTZ8, -4.22%












 is lower by 3.2% at $4,650 and the CME Group November contract














BTCX8, -4.55%












was off 4.1% at $4,635.

Read: Why bitcoin prices are staging a fresh collapse

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