The downturn weighed heavier on smaller tokens like Ether and Dogecoin.
A group of US exchange-traded funds investing directly in Bitcoin on Thursday snapped a 15-day streak of continuous inflows to post a record outflow of US$680 million, according to data compiled by Bloomberg, underscoring the shift in sentiment.
It’s “pretty typical” to see such corrections in crypto bull markets, said Strahinja Savic, head of data and analytics at FRNT Financial, while QCP Capital said in a note that the root cause of the selloff is the market’s “overly bullish” positioning.
See also: The Trump family is going all-in on crypto projects, from Bitcoin mining to stablecoins
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.”
See also: XRP to hit US$12.50 by end-2028: Standard Chartered
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 US$97,878 as of 7.41am 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.
Charts: Bloomberg
