The difficulty of trying to crack US$100,000 for the first time “could convince traders that the top is in, and profits should be locked in now”, wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter. However, any such episode should be “fleeting”, she added.
Cryptocurrencies faced a bout of risk aversion on Tuesday after Trump roiled global markets by posting about plans for additional tariffs on Chinese imports and 25% levies on products from Mexico and Canada. US equity futures fell and a dollar gauge climbed in a sign of investor caution.
“People have been looking for an excuse to take some profits,” said Adrian Przelozny, chief executive of crypto exchange Independent Reserve. “We’re still very confident the current bullish market sentiment will continue into 2025.”
See also: Bitcoin faithful rejoice as US$100 billion era nears
Trump’s pledges
Trump has pledged to make the US the global home for crypto by fostering supportive regulations as well as a national Bitcoin stockpile. Questions remain about how quickly he can make the changes and whether all are feasible.
In a research note, TD Cowen analyst Jaret Seiberg said the president-elect after his Jan 20 inauguration “will gain immediate control of the Securities & Exchange Commission”, adding that would be a “positive sign when it comes to easing crypto enforcement and facilitating a path to compliance”.
See also: Bitcoin hits record high of US$120,000 as bullish momentum builds
Trump, a one-time crypto skeptic, pivoted into a supporter after digital-asset firms spent heavily during election campaigning to promote their interests. Growing signs emerged in recent days of a tightening US embrace of crypto.
As a result, more than US$7 billion poured into US spot-Bitcoin exchange-traded funds after the election. The ETFs now have total assets of US$105 billion.
The recent Bitcoin retreat is “a much needed pullback to work off overbought readings, rather than a reversal lower or anything sinister”, said IG Australia Pty Market Analyst Tony Sycamore. “It also provides a reminder that markets, even crypto markets, don’t move in straight lines indefinitely,” he said.
Chart: Bloomberg
