Monday’s rally in the crypto markets was quickly undone on Tuesday with bitcoin falls back below $104,000.
After briefly topping $107,000 overnight, the biggest cryptocurrency fell to $103,200 by US morning hours. The drop erased gains from President Donald Trump’s “tariff dividend” plan and rising optimism that the U.S. government shutdown is ending.
Ethereum’s Ether fell 1.2% to below $3,500 and large-cap altcoins like Solana’s SOL , and fell 3%-4%, marking a broad retreat across digital assets.
The sell-off extended to crypto-related stocks, particularly among bitcoin miners positioned as infrastructure players in the artificial intelligence (AI) boom. CleanSpark (CLSK) fell 8%, Hut 8 (HUT) fell nearly 9%, and Core Scientific (CORZ) fell 11.5% in the early session. TeraWulf (WULF) and Bitdeer (BTDR) also posted double-digit declines.
The sector-wide weakness was due to a list of companies reporting weaker-than-expected earnings and growth prospects, in a sign that the red-hot trade in AI infrastructure, fueled by high expectations of demand for increased computing capacity, is heading for a correction.
Cloud computing provider CoreWeave lowered its expectations for the next quarter, citing data center development delays, sending its stock down 15% to its weakest level since early September. TeraWulf reported weak earnings and BitDeer posted deeper-than-expected losses and delays in its next-generation ASIC chips.
Rounding out the negative headlines was Japanese investment bank SoftBank selling its entire stake, worth $5.8 billion, in chipmaking giant and AI bellwether Nvidia (NVDA), driving the world’s most valuable company’s stock 3.5% lower. The tech-heavy Nasdaq fell 0.7%, while the S&P 500 lost 0.3%.
Also this morning, ADP reported that US private employers shed an average of 11,250 jobs per week in the four weeks ended October 25, signaling a worsening labor market.
The CME FedWatch tool now prices a roughly 67% chance of a rate cut at the Federal Reserve’s December meeting, while Polymarket sees it slightly higher at 72%.
With Tuesday’s tumble, BTC has now filled the so-called CME hole that formed over the weekend. The gap occurs when bitcoin futures traded on the CME, the preferred marketplace among US institutions, open higher or lower than where it closed the previous session.
BTC revisiting these gaps in price is often seen in market behavior, although not all gaps are necessarily filled, noted CoinDesk senior analyst James Van Straten.
While overall sentiment in the crypto markets has improved over the past few days as BTC and ETH bounced off the lows, traders are using the rebound as an opportunity to take profits across the board, Jasper De Maere, an OTC desk strategist at trading firm Wintermute, wrote in a Tuesday note.
“After all, the theme is still profit-taking in strength, leading to short-term outperformance,” he said. “The consensus is building that the majors should move up first.”
