At one point, the digital currency slid below $29,000 and briefly turned negative for the year. Later in the day, bitcoin pared its declines and turned positive.
Tuesday's move lower was a continuation of recent selling as China expanded its crackdown on crypto mining and urged financial institutions not to provide services to the industry.
Bitcoin has plunged more than 50% from its all-time high in April near $65,000. At the time, it had a market value of more than $1 trillion.