Bitcoin price has fallen sharply as the rally following Donald Trump’s election victory has ground to a halt. Analysts believe profit-taking is the main reason for the decline, but it is still possible for the largest cryptocurrency to hit $100,000.
Bitcoin price has fallen sharply in the past 24 hours, falling 3.6% to just above €89,000. The pullback appears to be due to profit-taking as the post-Trump rally slowed and cryptocurrency investors lacked a new catalyst to propel it above the key psychological barrier of $100,000.
On November 22, Bitcoin hit a new high of over $99,000, a 46% increase since November 5, following Trump’s victory in the US election. Bitcoin rose before and after the US election as markets expected the Trump administration to adopt crypto-friendly policies. During his campaign, the president-elect said he would make America the “crypto capital.”
Despite the decline, analysts believe Bitcoin’s uptrend is not over.
“There is no doubt that reaching the $100,000 mark will be a significant psychological level for many and we could see some profit-taking along the way,” wrote Josh Gilbert, market analyst at eToro Australia.
Bitcoin has gained 122% year-to-date, buoyed by the approval of a Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) in February and the halving in April. Meanwhile, central bank interest rate cuts and liquidity easing have provided a macro tailwind for cryptocurrencies this year.
Technical analysis shows that Bitcoin’s charts are showing signs of overbought conditions, which is likely to lead to a further correction. Some analysts expect the decline to take it to $80,000 before consolidating for another possible bull run. However, markets will need fresh catalysts to push beyond the $100,000 mark.
Bitcoin has reached new highs every four years during the last two bull cycles since 2017. Each cycle saw a 10-fold increase before a 70-80% decline.
Bitcoin has risen approximately 560% from its low two years ago, suggesting there may be more room for growth if history repeats itself. | BGNES
