Bitcoin’s ambitious march toward the $100,000 milestone has encountered a slowdown, with the cryptocurrency recently retreating to around $95,000 after touching an all-time high of over $99,500. Analysts are attributing the pullback to profit-taking by new investors, even as long-term holders maintain their positions.
The Surge Fueled by Optimism
Bitcoin’s rally gained momentum following Donald Trump’s electoral victory, as expectations of a crypto-friendly administration and regulatory clarity bolstered confidence in the market. This optimism extended to other digital assets, pushing Bitcoin’s value to unprecedented heights.
Galaxy Digital CEO Mike Novogratz highlighted the impact of recent entrants to the market, stating in an X post, “Most of the selling is coming from 2024 buyers who bought above $56,000. Normal profit-taking.” Bitcoin analyst James Check added that investors who entered the market around $68,000 six weeks ago were responsible for much of the selling activity.
ETF Outflows Add Pressure
The downturn was also reflected in Bitcoin exchange-traded funds (ETFs), which experienced significant outflows last week. According to Farside Investors, the category saw its third-largest single-day outflows on record, totaling $435.3 million.
This trend comes after a period of substantial inflows into ETFs, with BlackRock’s iShares Bitcoin Trust (IBIT) recording $267.8 million in inflows the previous Monday, despite the overall net outflows for the category. ETFs, which hold Bitcoin directly, played a key role in driving the cryptocurrency’s rise earlier in the year, as increased investor demand necessitated additional purchases of the asset.
Bitcoin’s Performance So Far
Despite the recent dip, Bitcoin’s value has more than doubled in 2024, recording gains of approximately 120%. In comparison, the S&P 500, a major stock market index, has risen by around 25% during the same period.
While some experts predict Bitcoin will surpass the $100,000 mark, others caution against assuming such levels will be sustained. Novogratz, in a CNBC interview, forecasted a price correction but noted he did not expect Bitcoin to drop below $80,000.
Corporate Investments Could Steady the Market
Meanwhile, corporate interest in Bitcoin continues to grow. MicroStrategy recently announced an additional $5.4 billion Bitcoin purchase, with companies like Marathon Digital, Semler Scientific, and Rumble also increasing their Bitcoin holdings.
According to Coinbase Research, corporate purchases could provide vital support for the market. “We think that these corporate inflows represent an increasingly important source of capital inflow into the space,” Coinbase researchers stated. “This could contribute to continued market momentum in the near term.”
The coming months will determine whether Bitcoin can rally past the elusive $100,000 milestone or if market forces will continue to temper its climb.
