Bitcoin’s decline deepened after the token’s record-breaking rally

(Bloomberg) — Bitcoin’s decline extended from a record high earlier this week to more than 10% at one point, as a lower scope for looser U.S. monetary policy dampened speculative enthusiasm.

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The price of the native cryptocurrency fell to a low of $95,564 on Thursday, two days after hitting an all-time high above $108,000. The downturn affected smaller tokens like Ether and Dogecoin more.

Strahinja Savic, head of data and analytics at FRNT Financial, said it is “very typical” to see such corrections in bullish cryptocurrency markets.

The Federal Reserve’s hawkish approach on Wednesday affected most risk assets. Bitcoin is still up nearly 50% since pro-crypto Donald Trump won the US presidential election on November 5.

“It looks like some profit-taking at the end of the year,” Parataxis’ Edward Chen said. “There was nothing fundamental that led to the sell-off.”

With fewer Fed rate cuts expected for 2025, some investors may choose 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 does not mean that we are set to see a price collapse any time soon, but it is clear that the momentum has run out of this move and buyers have lost dominance and control of the tape.”

Bitcoin was trading at $97,836 as of 7:10 am on Friday in Singapore. It has more than doubled this year, thanks to a surge of inflows into US exchange-traded funds for the token.

–With assistance from Olga Kharif.

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