WASHINGTON, D.C.: Bitcoin is closing October in the red for the first time in seven years, breaking a streak that earned the month its "lucky" reputation among cryptocurrency traders.

The world's largest digital asset is set to fall nearly five percent this month, pressured by market volatility, fading risk appetite, and uncertainty over U.S. monetary policy.

"Bitcoin came into October tracking gold and stocks near all-time highs," said Adam McCarthy, senior research analyst at digital market data firm Kaiko. "But when uncertainty hit, people didn't rotate back into bitcoin en masse."

The setback follows a turbulent month in global markets triggered by U.S. President Donald Trump's announcement of 100 percent tariffs on Chinese imports and threats of export controls on critical software, which sparked the largest crypto liquidation in history.

Bitcoin plunged to US$104,782 on October 10 and 11, just days after notching a new record high above $126,000, underscoring the asset's volatility. "That washout on the 10th reminded people this asset class is still very narrow," McCarthy said. "Even bitcoin and ether can drop 10 percent in 20 minutes."

Investor sentiment toward riskier assets has cooled as the U.S. Federal Reserve pushed back against market expectations of further rate cuts this year. The ongoing government shutdown, which has delayed key economic data releases, has added to the uncertainty.

Meanwhile, top Wall Street figures have sounded alarms about overheated valuations. JPMorgan Chase CEO Jamie Dimon warned earlier this month of a heightened risk of a significant market correction within the next two years.

"Participants remain hesitant as they process what has become the largest liquidation event on record," said Jake Ostrovskis, head of over-the-counter trading at Wintermute. "This caution persists amid ongoing speculation about specific vulnerabilities that may still exist in the system."

Despite the October dip, bitcoin remains up more than 16 percent year-to-date, supported by renewed regulatory acceptance and growing institutional adoption.

Cryptocurrencies have generally benefited this year from Trump's pro-digital asset stance, which has included the dismissal of several high-profile lawsuits against major crypto platforms and new regulatory guidance designed to integrate digital assets into traditional financial systems.

Still, analysts say bitcoin's October stumble highlights its susceptibility to policy shocks and shifting investor sentiment, even in what was once considered its most reliable month.