After moving within a few hundred dollars to $100,000 on Friday, Bitcoin is seeing its most significant pullback since the election, as investors appear to be engaged in a round of profit-taking following the token’s recent rally.
Bitcoin fell 2% on Tuesday, falling to a low of $91,400, as the native cryptocurrency continued a decline that began over the weekend. The broader cryptocurrency market has fallen more than 3% in the past 24 hours, according to the Coindesk 20 Index, a measure of the performance of the top 20 cryptocurrencies.
Bitcoin-related stocks such as Coinbase Microstrategy also declined.
Omid Malkan, a professor at Columbia Business School, said: luck This behavior is on par with volatile assets like Bitcoin, especially since the currency has grown by about $30,000 in such a short period of time.
“Bitcoin tends to be more volatile during bull markets than bear markets. So, it’s not at all unusual that, as it goes up, it also has big pullbacks. luck. “In fact, this is the norm.”
Bitcoin’s historic rally, which saw the coin reach a new all-time high of $99,500 on Friday, has increased liquidity in the market. Microstrategy, a self-proclaimed “Bitcoin development company,” has benefited from the price action, increasing the pace of its bitcoins. purchases In recent weeks. Bitcoin spot exchange-traded funds, an indicator of demand for the currency, recorded outflows on Monday for the first time in five days, bleeding more than $438 million.
While Malkan says it’s still “very possible” that Bitcoin could reach six figures before the end of the year, he noted that the $100,000 mark represents a “psychological barrier.”
“It’s a well-documented phenomenon for markets in general, that round numbers, for obvious reasons, have a lot of psychological significance, which is why people who do more technical types of analysis tend to think of them as maybe a drag, or what they do.” “Resistance to the call is on the way up,” he said.
Despite this week’s stumble, Bitcoin is still up 30% since the November 5th election that returned former President Donald Trump to office. The cryptocurrency market has enjoyed a massive run amid optimism that Trump’s victory will translate into a regulatory shift in favor of cryptocurrencies.
In addition, market optimism was boosted by the announcement by Securities and Exchange Commission Chairman Gary Gensler, whom the industry had viewed as an unfairly aggressive regulator, that he would step down on Inauguration Day, helping to… Operator Bitcoin recently reached $100,000.
