This is why Bitcoin can’t break $100K despite the hype

Bitcoin is persistently trading below the $100,000 threshold after a notable rally that commenced on November 5, coinciding with the re-election of President Donald Trump. The cryptocurrency surged over 40%, reaching a record high last week, peaking above $99,000. However, it declined slightly, holding around $98,243.25 early Monday, as seen in CoinGecko data.

Bitcoin struggles below $100,000 as investors take profits

Analysts attribute Bitcoin’s struggle to breach the $100,000 mark to investors taking profits following the substantial post-election rally. Andre Dragosch, head of research for Europe at Bitwise, noted that long-term holders have begun distributing considerable amounts of their Bitcoin holdings, according to CNBC. This trend, he states, indicates that the current market may experience a temporary halt, yet it could represent a bull market correction rather than a shift in overall trend. Dragosch emphasized that Bitcoin valuations still have room for appreciation and remain far from excessive.

Mark Novogratz, CEO of Galaxy Digital, told CNBC’s “Squawk Box” on Friday that he predicts that Bitcoin will eventually surpass the six-figure milestone. However, he cautions that the current environment is characterized by high leverage, leading to anticipations of a price correction. He referenced a significant seller who has reportedly offloaded between $14 and $15 billion in Bitcoin, which may have exerted downward pressure on the asset’s price.

Market sentiment and potential for a turnaround

According to data from Santiment, market sentiment for leading cryptocurrencies, including Bitcoin and Ethereum, has cooled off after initially bullish reactions post-U.S. election. Despite Bitcoin approaching the $100,000 benchmark, its recent stagnation suggests a decline in trader optimism. This downturn is reflected in the social sentiment metric, which has dipped significantly.

Notably, data from IntoTheBlock reveals that a substantial base of around 458,000 addresses collectively holds 344,000 BTC, potentially laying a groundwork for future upward momentum. Approximately 60,000 new addresses have acquired 22,740 BTC above the current trading price. Historically, lower sentiment often signals an impending upward trend; thus, the recent cooling could indicate a strong setup for Bitcoin’s next surge.

David Morrison, senior market analyst at Trade Nation, remarked that while the $100,000 barrier is significant, it appears to be a stubborn hurdle for further gains. He indicated that if Bitcoin’s value begins to decline from its current level, this might hinder future performance, particularly if long-term holders decide to liquidate their investments.

Regulatory factors continue to play a significant role in the cryptocurrency market. Marion Laboure, a strategist at Deutsche Bank, highlighted that while Trump has vocalized support for cryptocurrencies and proposed ambitious plans for a national Bitcoin strategy, substantial changes would require congressional approval. The timelines for any meaningful legislation remain uncertain, which could complicate the prospects for quick advancements in the market.

Another point of view: Why Bitcoin could hit $100K sooner than expected

Moreover, Laboure noted that while the potential for federal regulation exists, it is still distant in practical terms. Despite this uncertainty, she believes that regulation could ultimately serve as a net positive for the crypto industry. As traders focus on smaller altcoins, the potential for broader market corrections looms, prompting some to rethink their strategies and positions within the market.

The ongoing fluctuations in Bitcoin’s price and the mixed market sentiment reveal a complex interplay of factors at work. As the cryptocurrency strives to break the elusive $100,000 barrier, developments related to investor behavior, regulatory changes, and market dynamics will continue to warrant close observation.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial or investment advice. Please consult with a qualified financial advisor before making any investment decisions.

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