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Bitcoin retreated below $95,000 at one point on Tuesday, while an index of smaller digital assets slid more than 10%, one of its biggest drops of the year.
Speculators plowed into crypto after the US election on November 5, catalyzed by Trump’s pledge of supportive rules and controversial backing for a national Bitcoin reserve. At the same time, the hair-trigger volatility of digital assets leaves traders prone to exiting bets quickly once momentum turns.
Bitcoin hit a record $103,800 on December 5 but subsequently struggled to stay above the six-figure level. The overall crypto market has shed about $250 billion in the past 24 hours, based on figures from tracker CoinGecko.
“Big, round numbers are a real thing and often take time to overcome,” Charlie Morris, chief investment officer at ByteTree Asset Management, wrote in a note. The $100,000 level “is a number we should get used to because unless the flows can surge from here, that is where we’ll be spending time,” he added.
Trump has picked a digital-asset supporter to be the next head of the US securities regulator and named the first-ever White House czar for artificial intelligence and crypto. He used to be a crypto skeptic but pivoted as the industry spent big on promoting its interests during election campaigning.
For fans of digital assets, a boom lies ahead as Trump rips up a crackdown imposed by the Biden administration. Critics say wider mainstream crypto acceptance brings a panoply of risks.
About $10 billion has poured into US spot-Bitcoin exchange-traded funds since Trump became president-elect. Meanwhile, Bitcoin accumulator MicroStrategy Inc. bought another $2.1 billion of the token.
Bitcoin changed hands at $97,350 as of 7:26 AM on Tuesday in Singapore. Smaller tokens such as Ether and meme-crowd favorite Dogecoin wavered.
Fairlead Strategies LLC technical analyst Katie Stockton in a note recommended a “neutral short-term bias” after Bitcoin’s failure to remain above $100,000.
