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Is this the sound of the art bubble deflating?

A 3-foot tall iron sculpture by Picasso has just rattled the multibillion-dollar art market.

The sculpture, called "Tete," failed to sell at a Christie's auction Monday night. It was estimated the piece, which was a model for a 50-foot sculpture built for Daley Plaza in Chicago, would fetch between $25 million and $35 million.

The work was one of 17 that failed to sell at the auction of works from the collection of Jan Krugier. Another was a 1911 Wassily Kandinsky landscape that was expected to sell in the range of $20 million to $25 million, but there were no bidders. Many others sold below their estimated value.

In total, Christie's was expected to fetch between $158 million and $224 million from the sale. Instead sales totaled $92.5 million.

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It's tempting to see the sale as a sign that the frothy art market may finally be breaking down. The big auctions in New York this week and next are expected to fetch more than $1.5 billion. Monday's sale was one of many smaller auctions that lead up to the all-important contemporary art evening sales next week.

Pablo Picasso's "Tete" at Christie's in New York.
Don Emmert | AFP | Getty Images
Pablo Picasso's "Tete" at Christie's in New York.

But art dealers and market experts say the Krugier sale had unique problems and is not a sign of bad things to come in future sales. They say many of the Krugier pieces had been offered for sale for years at various art fairs and some had been purchased recently for much lower prices at auction.

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"I don't think this presages anything," said Andrew Fabricant, a director at the Richard Gray Gallery in New York. "It was a rather disparate bunch of material and some of it has a very recent track record."

There were some gems in the group that sold for much more than their estimate. A Picasso portrait of his two children, called "Claude et Paloma," sold for $28.2 million—far more than the estimate of $9 million to $12 million. Picasso's "Cigare," a 4-inch stick of wood painted to look like a cigar, went for $1.1 million—more than three times to the top estimate.

And an African mask from the Ivory Coast that had once been owned by André Breton and Picasso went for $1.4 million, nearly three times its low estimate.

By CNBC's Robert Frank. Follow him on Twitter @robtfrank.

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