Bitcoin Sells Off Alongside Risk Markets As Investors Smell Smoke

Key things:

• Disney and other consumer names disappointed on earnings, adding pressure to markets after the extended US government shutdown.

• Analysts see no sign of an insider-driven selloff in Bitcoin, with BTC instead reflecting broader doubts about valuation and US economic stability.

The tech-heavy Nasdaq fell 2.3% on Thursday after Palantir CEO Alex Karp made cautious remarks about the profitability of the artificial intelligence sector. In an interview at Yahoo Finance’s Invest event, Karp he said not every AI implementation will “create enough value to justify the actual cost.” Investors fear that the US economy is entering a weaker phase.

Shares of Palantir (PLTR), Intel (INTC), and CoreWave (CRWV) posted daily losses of 6% or more. Bitcoin (BTC) followed a broader risk-off move, trading up 6.5% after testing the $105,000 level on Wednesday. The withdrawal triggered liquidations of $350 million leveraged BTC bull positionswhich likely contributes to the loss of a crucial $100,000 in psychological support.

There is little evidence that traders are specifically worried about Bitcoin, or that any major event has created further fear or uncertainty. Analysts stress that the recent selling pressure does not support the narrative that Bitcoin insiders are cashing out. According to PlanB, the creator stock-to-flow metriclong-term supply pressure came from holders who were active between 2017 and 2022.

The cost of building artificial intelligence and US macroeconomic problems worry investors

Shares of Tesla ( TSLA ) deepened their decline after the company was forced to recall more than 10,500 units of its energy storage system for self-consumption. At least 22 reports of overheating linked to the $8,000, US-made device prompted the precautionary action. TSLA was already under pressure after the outline false to build 10 million units of Optimium humanoid robots in Austin.

Apart from the AI ​​sector, traders lowered their expectations for the development of the US central bank’s monetary policy. According to the CME FedWatch Tool, implied odds the Fed’s interest rate cut below 3.5% by January 2026 fell to 20%, from 49% on October 13. Analysts note that the Fed’s main concern remains sticky inflation, which continues to hit lower-income workers the hardest, according to on Yahoo Finance.

U.S. President Donald Trump signed a temporary government funding bill to end the shutdown, but White House press secretary Karoline Leavitt said Wednesday that some October economic reports may not be released. Former Fed Vice Chairman Lael Brainard warned that investment in AI is masking cracks “under the hood” as the rest of the economy struggles with weak demand.

Shares of Disney ( DIS ) fell 8% after the company reported weaker-than-expected quarterly results, weighed down by its streaming and theater segments. The entertainment giant joins several other consumer-focused companies that have recently disappointed on earnings, including DoorDash ( DASH ), Dollar Tree ( DLTR ) and Starbucks ( SBUX ).

Related: US SEC and CFTC operations to resume after 43-day government shutdown

Investors now have a limited view of the economic outlook after a record 43-day shutdown of government funding. While some analysts argue that the US Gross domestic product could take a 2% hit, others believe most of the negative effects will be reversed once federal spending returns. RBC analysts raised worry on the interpretation of U.S. labor market data, “because vacated and essential workers would be considered unemployed.”

Investors may take time to gauge whether stock market valuations are stretched and gauge the likelihood that the US government will inject liquidity through tax cuts or stimulus checks. Until then Bitcoin (BTC) likely reflects broader economic uncertainty compounded by a lack of consistent and reliable data.

This article is for general informational purposes and is not intended and should not be construed as legal or investment advice. The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.