Bitcoin (BTC-USD) has experienced its longest losing streak since Donald Trump’s election victory, following a failed attempt to breach the $100,000 mark. This downturn has dampened the speculative excitement that had surged in the wake of Trump’s favorable stance towards cryptocurrencies.
As of Tuesday morning in London, Bitcoin had completed a three-day decline of approximately 6%, trading at around $94,000. The broader cryptocurrency market, which had seen a remarkable $1 trillion increase since Election Day on November 5, also appears to have stalled in momentum.
The recent difficulties in surpassing the $100,000 threshold may have led traders to believe that Bitcoin’s peak has been reached, prompting them to secure profits. Noelle Acheson, author of the *Crypto Is Macro Now* newsletter, noted that this sentiment could be temporary. She suggested that while traders are locking in profits now, any significant downturn should not be viewed as a long-term trend.
In addition to profit-taking, cryptocurrencies are facing a wave of risk aversion triggered by Trump’s announcement of potential additional tariffs on China and neighboring countries like Canada and Mexico. This uncertainty has contributed to struggles in stock markets and a rise in the US dollar, indicating a cautious approach among investors.
Adrian Przelozny, CEO of Independent Reserve, commented on the current market sentiment, stating that traders have been looking for reasons to take profits but expressed confidence that the bullish trend in the cryptocurrency market would persist into 2025.
Trump’s commitment to establishing the US as a global hub for cryptocurrency through supportive regulations and a national bitcoin reserve has raised questions about the feasibility and timeline of these changes. In a research note from TD Cowen analyst Jaret Seiberg, it was highlighted that after his inauguration on January 20, Trump will gain control over the Securities and Exchange Commission (SEC). This transition is expected to be beneficial for easing regulatory enforcement surrounding cryptocurrencies and paving a smoother path toward compliance.
Interestingly, Trump’s transformation from a crypto skeptic to an advocate has been fueled by significant financial contributions from digital asset firms during his campaign. Following the election, there was an influx of approximately $7 billion into US spot-bitcoin exchange-traded funds (ETFs). However, this enthusiasm appears to be waning as evidenced by a $438 million outflow from these ETFs on Monday.
Market analysts are interpreting Bitcoin’s recent retreat as a necessary correction rather than an indication of a more severe downward trend. Tony Sycamore, a market analyst at IG Australia Pty, suggested that this pullback serves to alleviate overbought conditions and reminds investors that markets—including cryptocurrencies—do not follow a linear trajectory indefinitely.
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