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Bitcoin It traded stubbornly below the $100,000 mark, putting the brakes on the cryptocurrency’s strong rally that had moved it within striking distance of hitting key psychological levels.
The world’s largest cryptocurrency has gained more than 40% since the November 5 U.S. election, which re-elected Donald Trump as president.
Trump’s inauguration is not until January 20, 2025, but that has not stopped his pro-cryptocurrency comments from boosting market sentiment.
Bitcoin hit new highs last week, with prices climbing above $99,000 for the first time. However, prices have since taken a breather, with Bitcoin trading at around $98,243.25 early Monday, up just a few tenths of a percent on the day, according to CoinGecko.
CNBC asked analysts for their thoughts on Bitcoin’s failure so far to break the much-anticipated $100,000 mark.
Investors take profits
Andre Dragosch, head of European research at crypto-focused asset manager Bitwise, said Bitcoin is likely to remain below psychological levels as investors profit from the post-election surge.
Dragosch said in a research note shared on Monday that Bitcoin has “so far failed to break through” $100,000 as “long-term holders have begun to allocate large amounts of Bitcoin on the recent rally.”
Bitcoin
He added that he expects Bitcoin’s rally to “pause in the short term as sentiment remains high and positioning appears to be a little tight.”
However, Dragosh said that “this may be a bull correction rather than a change in trend,” adding that overall, “Bitcoin valuations are still far from high.”
He added that tight Bitcoin supply caused by events such as the so-called “halving” earlier this year, which cut the number of new Bitcoins issued to miners in half, will continue to support Bitcoin prices in 2025.
“Leverage”
Mark Novogratz, CEO of digital asset management firm Galaxy Digital, said last week that while he believed it was “inevitable” for Bitcoin to hit the six-digit milestone after the election, a pullback was expected.
“There’s a lot of leverage in the system right now,” Novogratz, a long-time cryptocurrency investor, told CNBC.Friday, “Squawk Box.”
Novogratz added that he advocates for investors to buy “straight Bitcoin” rather than buying into Bitcoin-related companies such as MicroStrategy, which has a large amount of billions of dollars in Bitcoin in its corporate financial reserves.
He also noted that an unknown seller has been dumping cryptocurrencies in recent days, which could put pressure on the coin’s price. “There was a big seller selling Bitcoin last week between 92, 93 and 94. There was probably $14 to $15 billion of Bitcoin sold there,” Novogratz said on the broadcast.
Where will Bitcoin go from here?
David Morrison, senior market analyst at brokerage Trade Nation, said that while $100,000 is a “nice round number,” it “feels like it has become a very high barrier to further upside, even if it’s obstacle.
“If Bitcoin starts to disappear from here, this may be all we get – especially if long-term holders decide to cash out early,” Morrison told CNBC via email.
Still, he added, “there’s a good chance the upside momentum will build up enough energy for a surge here.”
“If that’s the case, then that could trigger another push higher,” Morrison said.
Marion Laboure, Strategist Deutsche BankAlthough Trump has said he will continue to support Bitcoin and the broader crypto industry, the prospect of specific federal crypto legislation is still some way off.
Trump’s pro-cryptocurrency pledges include transforming the United States into a global cryptocurrency hub, establishing a strategic national cryptocurrency reserve, and replacing SEC Chairman Gary Gensler, who announced last week that he would Resigned on January 20.
Deutsche Bank’s Rabble said she thinks the idea of a U.S. national bitcoin is still far away.
At the same time, major reforms will “require congressional approval on time, which makes these ambitious long-term goals more or less achievable, and there’s also some potential turmoil for these reforms to not live up to market expectations,” she told CNBC’s “Squawk Box Europe” ”.
Still, Labour added that she believed regulation “would be a positive for the industry.”
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