Bitcoin fell sharply on Tuesday, sliding below $90,000 for the first time since April and wiping out its 2025 gains as risk-off sentiment rippled through global markets. The decline coincided with a broader pullback in technology and AI-linked equities, intensifying scrutiny over the cryptocurrency's influence on asset prices as macro uncertainty deepens. By late afternoon, Bitcoin hovered near $91,000 after touching an intraday low of $89,259, according to FactSet.
The reversal underscores how quickly enthusiasm around speculative assets has faded since Bitcoin's October peak above $126,000. Over the past six weeks, nearly $1.2 trillion has been erased from the total cryptocurrency market value, data from CoinGecko show. Investors appear to be reassessing expectations for U.S. interest-rate cuts while unwinding leveraged positions accumulated during the fall rally.
The downturn has also coincided with equity losses in the Nasdaq-100, which is down 4% this month. Many of the same investors who piled into tech stocks during the AI surge also built sizable Bitcoin positions, reinforcing correlations between the two sectors. Mike O'Rourke, chief market strategist at Jones Trading, said the relationship between Bitcoin's slide and the broader equity sell-off "is undeniable." He added, "It is truly the tail wagging the dog when a $1.8 trillion market cap speculative asset is significantly influencing the $32 trillion market capitalization index... It is alarming to see the index... take cues from Bitcoin."
The sell-off has pressured some of the market's most Bitcoin-exposed stocks. Shares of Strategy, viewed as a leveraged proxy for Bitcoin because of its borrowing to acquire additional holdings, fell again in premarket trading and entered Tuesday with a 27% loss for November. Cryptocurrency miners such as Riot Platforms and Mara Holdings, along with exchange operator Coinbase, have also dropped alongside the wider retreat in crypto-linked assets.
Analysts say the decline reflects evaporating confidence after an October flash crash triggered $19 billion in liquidations across leveraged positions. Joseph Edwards of Enigma Securities noted that ETF and institutional outflows have accelerated as expectations for favorable U.S. regulatory action cool. He said, "The sell pressure here isn't extraordinary, but it's coming at a relative weak point on the buy side ... a lot of retail buyers were stung during the flash crash last month."
Signs of contagion are building as publicly traded companies that accumulated cryptocurrency on their balance sheets face mounting paper losses. Standard Chartered recently estimated that a drop below $90,000 could push half of these firms' Bitcoin holdings "underwater," potentially exposing them to accounting strains if prices continue to fall. Listed firms now hold roughly 4% of all Bitcoin in circulation and 3.1% of ether, according to the bank's analysis.
Market participants have also cited broader macro concerns, including doubts over whether the Federal Reserve will deliver the rate cuts that drove risk assets higher earlier in the year. Joshua Chu, co-chair of the Hong Kong Web3 Association, said, "The cascading selloff is amplified by listed companies and institutions exiting their positions after piling in during the rally, compounding contagion risks across the market." He added, "When support thins and macro uncertainty rises, confidence can erode with remarkable speed."
Ether has also sagged under the mounting pressure, falling nearly 40% from its August peak above $4,955. European equities opened lower on Monday, reflecting widening anxiety about valuation pressures in the tech sector. Matthew Dibb, chief investment officer at Astronaut Capital, said, "All in all sentiment is pretty low in crypto and has been since the leverage wipeout of October."
