Bitcoin price drops below $100,000 in biggest slump since 2016

Bitcoin has hit a rough patch recently, experiencing its longest losing streak since the 2016 US election after failing to reach the coveted $100,000 mark. Over the course of four days, the digital asset lost about 8% of its value, trading at $91,615 on Tuesday. This downturn also impacted the broader crypto market, which had seen a $1 trillion surge since Election Day on November 5th.

Some experts believe that the struggles to break the $100,000 barrier may signal a temporary halt to the recent bullish trend. However, Noelle Acheson, author of the Crypto Is Macro Now newsletter, remains optimistic, suggesting that any setbacks will likely be short-lived.

In addition to the challenges within the crypto market, recent announcements by President-elect Trump regarding additional tariffs on China, Canada, and Mexico have also contributed to a sense of risk aversion among investors. As a result, stocks have been fluctuating and the dollar has remained strong, reflecting a cautious stance within the market.

Despite these short-term fluctuations, many in the industry, like Adrian Przelozny, CEO of crypto exchange Independent Reserve, remain confident in the long-term growth of the market. Przelozny believes that the current positive sentiment will continue well into 2025.

Trump has made pledges to position the US as a global leader in the crypto space by introducing supportive regulations and creating a national Bitcoin stockpile. Although the timeline and feasibility of these changes remain uncertain, industry experts like TD Cowen analyst Jaret Seiberg see potential for positive shifts in crypto enforcement and compliance under the new administration.

Recent data shows that approximately $7 billion flowed into US spot-Bitcoin exchange-traded funds following the election, indicating a growing interest in crypto assets. However, demand has eased slightly, with a $438 million outflow from ETFs on Monday as the market recalibrates.

Overall, the recent pullback in Bitcoin prices is viewed as a necessary correction to alleviate overbought conditions rather than a sign of a more significant downturn. Market analysts like Tony Sycamore emphasize the importance of remembering that markets, including the crypto market, do not move in a straight line indefinitely.