Monday’s crypto market rally was quickly undone by Bitcoin on Tuesday Less than $104,000.
The largest cryptocurrency briefly topped $107,000 overnight, but fell to $103,200 by early morning hours in the US. The decline erased gains supported by President Donald Trump’s “tariff dividend” plan and growing optimism that the U.S. government shutdown will soon end.
Ethereum Ether It fell 1.2% to below $3,500, and large altcoins such as Solana’s SOL also fell. , and It fell 3%-4%, marking a significant pullback across digital assets.
Selling spread to crypto-related stocks, especially among Bitcoin miners, which are seen as infrastructure for the artificial intelligence (AI) boom. CleanSpark (CLSK) is down 8%, Hut8 (HUT) is down nearly 9%, and Core Scientific (CORZ) is down 11.5% in the early going. TeraWulf (WULF) and Bitdeer (BTDR) also posted double-digit declines.
The sector-wide slump stems from a list of companies reporting weaker-than-expected earnings and growth prospects, a sign that the red-hot AI infrastructure trade is due for correction, driven by high expectations for demand for increased computing power.
Cloud computing provider Coreweave cut its outlook for next quarter, citing delays in data center development, and its stock price fell 15%, its lowest since early September. TeraWulf reported weak earnings, and BitDeer posted larger-than-expected losses and delays to its next-generation ASIC chips.
Rounding out the negative headlines, Japanese investment bank SoftBank sold its entire stake worth $5.8 billion in semiconductor manufacturing giant and AI pioneer Nvidia (NVDA), sending the world’s most valuable company’s stock price down 3.5%. The Nasdaq Index, which has a high proportion of tech stocks, fell 0.7%, and the S&P 500 Index fell 0.3%.
Also this morning, ADP reported that U.S. private employers cut an average of 11,250 jobs per week over the four weeks ending October 25, suggesting a deteriorating labor market.
CME’s FedWatch tool currently estimates the probability of the Federal Reserve cutting rates in December at about 67%, while Polymarket puts the probability slightly higher at 72%.
With Tuesday’s decline, BTC closed the so-called CME gap that formed over the weekend. This gap occurs when Bitcoin futures traded on CME, the preferred market among US financial institutions, start higher or lower than the previous session’s closing price.
CoinDesk senior analyst James Van Straten noted that while it is common in market behavior for Bitcoin to revisit price gaps, not all gaps are necessarily closed.
While overall crypto market sentiment has improved in recent days with BTC and ETH rebounding from their lows, traders across the board are using the pullback as an opportunity to book profits, Jasper de Meere, OTC desk strategist at trading firm Wintermute, said in a note on Tuesday.
“When it comes to alternatives, profit-taking is still the theme, leading to near-term outperformance,” he said. “There is a growing consensus that the majors need to move up first.”