The price of Bitcoin has experienced a continued decline, retreating further from the significant psychological milestone of $100,000.
This drop is largely attributed to investors cashing in on profits following the cryptocurrency’s notable rally in the wake of the presidential election.
As the largest cryptocurrency by market capitalization, Bitcoin saw a dip of over 4%, bringing its value to $90,999.30, according to Coin Metrics.
Earlier in the session, it fell as low as $90,702.27. Meanwhile, the CoinDesk 20 index, which tracks broader cryptocurrency performance, declined by 4.78%.
Equity market proxies for crypto assets, such as Coinbase and MicroStrategy, also faced significant losses, with their shares falling 6% and 12%, respectively.
Mati Greenspan, the founder and CEO of Quantum Economics, commented on the situation in an email to CNBC, stating, "Bitcoin has been on a remarkable rally since Election Day with minimal corrections.
However, the $100,000 level remains a tough psychological hurdle. Breaking through it now would signal strong bullish momentum, but a temporary pullback may be necessary to build strength for the next attempt."
The consistent record-breaking performance of Bitcoin this month has prompted long-term holders to sell larger quantities in the spot market. Despite the selling pressure, these transactions have been offset by steady inflows into Bitcoin exchange-traded funds (ETFs) and large-scale acquisitions by MicroStrategy.
Notably, ETFs, which had been on a five-day growth streak, recorded $438 million in outflows on Monday. CryptoQuant defines long-term holders as entities holding Bitcoin for 155 days or more.
The selling trend persisted for a second consecutive day, as traders took profits following Bitcoin's postelection rally. This surge was largely fueled by optimism surrounding President-elect Donald Trump’s crypto-friendly policy agenda.
Brett Reeves of BitGo, a crypto infrastructure firm, shared his perspective with CNBC: "Historically, after reaching new all-time highs, Bitcoin typically enters a phase of consolidation before resuming upward movement.
With institutional investments growing, retail activity rising through ETFs and exchanges, and favorable macroeconomic and regulatory developments on the horizon, we could see a rapid resurgence in price momentum."
Since the U.S. presidential election, Bitcoin has surged by more than 30% and has achieved an impressive 114% gain year-to-date.
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