Bitcoin dropped below $100,000 on Tuesday, down over 6% and 20% off its October high

Bitcoin dropped below $100,000 on Tuesday, falling more than 6% in a single session as investors reacted to the worsening U.S. government shutdown and ongoing concerns about weaker economic growth.

The price is now sitting near its lowest level since June. Bitcoin is down about 20% from its early October high above $126,000. The move adds pressure to a market that has already been dealing with reduced enthusiasm and fading momentum.

The selling has been led by large holders, often called whales. Sean Farrell, who leads digital asset strategy at Fundstrat, said Monday night that these holders have been actively selling in recent weeks.

“Whales — they continue to hammer price,” he said. Farrell pointed out that billions of dollars’ worth of Bitcoin have moved from private wallets to exchanges, which usually means selling.

Data from Compass Point analyst Ed Engel shows that more than 1 million Bitcoin have been sold by long-term holders since late June. Ed noted that while it is normal for long-term holders to sell during bull markets, retail spot buying has been weaker than in past cycles.

Ed also said Bitcoin ETF inflows have slowed. “While we see support for BTC above $95k, we also don’t see many near-term catalysts,” Engel said. He added that “Uptober” failed to show up this year for the first time since 2018, when the market later fell 37% in November.

Shutdown stalls market and liquidity

The U.S. government shutdown is now on track to become the longest in history. Wednesday marks day 36, passing the previous record set in early 2019.

The latest effort to pass a temporary funding measure backed by Republicans failed in the Senate for the 14th time on Tuesday.

No further votes were scheduled on Tuesday for either the GOP measure or a Democratic alternative, which includes more funding for health care and other programs. Both of the two longest shutdowns happened during Donald Trump’s presidency.

At the same time, key economic data continues to show weakness. The U.S. manufacturing sector contracted again in October, marking eight straight months of decline. The equity market is also showing signs of strain.

Investors are watching Federal Reserve Chair Jerome Powell’s cautious tone after last week’s policy meeting. Powell did not commit to a rate cut in December, leaving traders unsure about the path of monetary policy.

The shutdown also affects liquidity. The Treasury General Account, the government’s main spending account, has been frozen in place. Farrell said the extended shutdown “delays expected TGA drawdowns and stalls liquidity tailwinds that were expected to support risk assets into year-end.”

He said an end to the shutdown would likely lift crypto markets. “I’m still optimistic for year-end,” Farrell said. “For now I think this is just some volatility that we’re going to have to manage.” Fundstrat still has a year-end Bitcoin target between $150,000 and $200,000.

Stock market shows internal weakness

The broader stock market is also flashing warning signs. Josh Brown said Tuesday on CNBC that the U.S. market is already in a correction, even though the major indexes have not shown it clearly.

“We’re actually undergoing a market wide correction right now,” he said. Josh explained that the reason most investors do not feel it is because the decline has not hit the major technology names that drive the indexes.

More than 30% of S&P 500 stocks are trading more than 20% below their 52‑week highs. Meanwhile, 6.5% of the index made fresh 52‑week lows on Tuesday.

The S&P 500 fell more than 1% on the day, dragged lower by weakness in AI‑linked stocks. Brown acknowledged that the market needs to reset.

“This is what healthy bull markets do,” Josh said. “They wick that enthusiasm off the top and reset.” He said this type of correction may be necessary before any attempt at a year‑end rally.

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