Bitcoin dropped below $103,000 on Tuesday as investors took profits after a short rally. The cryptocurrency briefly rose above $107,000 on Monday following optimism about the U.S. government reopening and President Donald Trump’s “tariff dividend” proposal. It later fell 2.6% to close at $103,177.
Profit-Taking Ends Short Rally
Traders sold Bitcoin after recent gains, leading to higher trading volumes and a drop in prices. The sell-off came just a day after Congress passed a bipartisan funding bill to end the month-long U.S. government shutdown. While the news initially boosted market confidence, the momentum quickly faded.
Bitcoin tested support near $102,700 before slightly recovering. Analysts said the decline was a normal correction after several weeks of growth. Other major cryptocurrencies also fell, with Ethereum down 3.7% to below $3,500 and Dogecoin losing 5%.
Trump’s “Tariff Dividend” Raises Market Doubts
Markets also reacted to President Trump’s new “tariff dividend” plan, which promises $2,000 payments to low- and middle-income Americans. The plan would use funds from new import tariffs, but experts say it could cost up to $600 billion per year and increase inflation risks.
The announcement briefly lifted Bitcoin, but uncertainty about how the policy would work reduced investor enthusiasm. Treasury Secretary Scott Bessent said no specific details were ready yet.
Investors Shift to Stocks as AI Sector Cools
Some investors moved money from crypto to traditional stocks, while enthusiasm for AI-related assets slowed. Shares of Bitcoin mining companies such as Bitdeer, Hut 8, and CleanSpark dropped by up to 10%. Reports of SoftBank cutting its Nvidia holdings also added pressure on tech-linked markets.
Institutional Investors Keep Buying
Despite the decline, institutional investors continued to buy Bitcoin. Spot Bitcoin ETFs recorded $1.15 million in inflows on Monday, and MicroStrategy added 487 BTC at an average price of $102,500. Institutional holdings now make up about 8% of Bitcoin’s total supply, showing continued long-term interest.
Analysts expect Bitcoin to test key support levels near $100,000 and $98,900. If those levels hold, the price could rebound. Longer-term forecasts remain positive, with some predicting Bitcoin could reach between $120,000 and $200,000 by the end of the year.
Market Outlook
Bitcoin’s next move will depend on investor confidence, inflation data, and progress on U.S. fiscal policies. While short-term risks remain, institutional buying and ETF inflows suggest the market’s foundation is still strong.
