The price of bitcoin retreated further from the psychological $100,000 milestone, as investors booked profits from the cryptocurrency’s gains following the presidential election.
The largest cryptocurrency by market capitalization was recently lower by more than 4%, at $90,999.30, according to Coin Metrics. Earlier, it fell as low as $90,702.27. The CoinDesk 20, an index measuring broader cryptocurrency performance, fell 4.78%.
Coinbase and MicroStrategy, equity market proxies for crypto assets, fell 6% and 12%, respectively.
“Bitcoin has been on a tear since Election Day … with very few pullbacks, but the $100,000 mark remains a formidable psychological barrier,” Mati Greenspan, founder and CEO of Quantum Economics, told CNBC by email. “While breaking through now would be a major bullish signal, a brief pullback may be needed to gather momentum before the next attempt.”
With bitcoin regularly hitting new records this month, long-term holders have increasingly been selling in the spot market in larger amounts. That selling pressure has so far been absorbed by inflows into bitcoin exchange-traded funds, which ended a five-day advance Monday and logged $438 million in outflows, and large purchases by MicroStrategy. CryptoQuant typically defines long-term holders as entities that have held bitcoin for 155 days or more.
Traders took profits for a second day following bitcoin’s postelection rally, which was fueled by optimism about President-elect Donald Trump’s pro-crypto policy platform.
“Historically, when new all-time highs are reached, there is typically a period of consolidation before further moves up,” Brett Reeves of Crypto infrastructure firm BitGo told CNBC. “We know that new institutional money is coming into the space and retail activity is picking up, both via ETFs and exchanges. With positive macro and regulatory news ahead, we could see a quick pick up in price activity.”
Bitcoin has gained more than 30% since the U.S. election and is up 114% this year.