Crypto markets took a hit on Tuesday, with Bitcoin and other major cryptocurrencies falling sharply. However, some relief came later in the day after comments from Federal Reserve Chair Jerome Powell suggested that interest rate cuts could be on the horizon. This helped prices recover slightly from their lowest points.

Bitcoin dropped to $109,800 early in the U.S. trading session after briefly nearing $116,000 overnight. It has since rebounded to around $112,600, still down about 2.8% in the last 24 hours. Ether fell 4%, while BNB, XRP, and Dogecoin also slid between 4% and 6%. The broader CoinDesk 20 Index declined by 3.2%.

The market found some support after Powell indicated that the Fed’s quantitative tightening program — which reduces its bond holdings — is nearing its end. He also mentioned signs of a weakening job market and tighter money conditions, which increase the chances of a rate cut this month.

U.S. stock markets reacted quickly. The Nasdaq and S&P 500 both bounced back during the day but still ended slightly lower, with losses of 0.75% and 0.15%, respectively.

Later in the day, a post by former President Trump on Truth Social added some uncertainty. He suggested banning cooking oil imports from China unless they buy more soybeans from the U.S., which caused markets to pull back again.

Meanwhile, crypto mining stocks had a strong day. Shares of companies like Bitfarms, Cleanspark, Iren, Marathon Digital, and TeraWulf each jumped over 10%. Investors are betting that rising demand for computing power — especially from artificial intelligence (AI) — will benefit these firms.

Despite the lack of momentum following last week’s sudden market crash, analysts see potential for recovery. Vetle Lunde from K33 Research said the recent sharp drop was due to a high amount of leveraged positions being wiped out — a process that often signals a market bottom.

Lunde believes this is actually a good setup for Bitcoin in the longer term. He noted that although trading activity might stay low for now, this kind of reset has historically led to more stable growth.

“Current price levels look good for buying more Bitcoin,” he said. “With leverage mostly cleared out and positive factors like expected rate cuts, growing institutional interest, and upcoming ETF developments, it’s a good time to slowly start accumulating.”