Bitcoin has dropped over 10% from its record $108,000 peak earlier this week, trading at $97,343 today. The slide, attributed to year-end profit-taking and reduced expectations for Fed rate cuts in 2025.. Experts caution short-term volatility but note such corrections are common in bull markets. Despite the downturn, Bitcoin remains up nearly 50% since the US presidential election.
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By Monique Mulima ___STEADY_PAYWALL___
A Bitcoin slide from a record high earlier this week extended to more than 10% at one point, as reduced scope for looser US monetary policy crimped speculative zeal.
The price of the original cryptocurrency dropped as low as $95,564 on Thursday, two days after setting an all-time peak just above $108,000. The downturn weighed heavier on smaller tokens like Ether and Dogecoin.
It’s “pretty typical” to see such corrections in crypto bull markets, said Strahinja Savic, head of data and analytics at FRNT Financial.
The Federal Reserve’s hawkish pivot on Wednesday weighed on most risk assets. Bitcoin is still up almost 50% since pro-crypto Donald Trump’s victory in the US presidential election on Nov. 5.
“It looks like some year-end profit taking,” said Edward Chin of Parataxis. “There wasn’t anything fundamental that triggered the selloff.”
With fewer Fed rate cuts now expected for 2025, some investors may be choosing to reduce their exposure and take profits.
“Technically, caution is warranted in the short term,” Chris Weston, head of research at Pepperstone Group, wrote in a note. “This doesn’t mean we’re due to see a collapse in price anytime soon, but the momentum has clearly come out of the move and the buyers have lost dominance and control of the tape.”
Bitcoin changed hands at $97,343 as of 5:04 a.m. on Friday in London. It has more than doubled this year, helped by a flood of inflows into US exchange-traded funds for the token.
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© 2024 Bloomberg L.P.
