Bitcoin Price Tumbles Following Failed $100,000 Breakout: Expert Says Pullbacks at Round Numbers Are Normal
Bitcoin came close to reaching $100,000 on Friday but has since experienced a 7% drop, sparking the most substantial pullback since the recent surge. As of Tuesday, Bitcoin is down 2%, hitting a low of $91,400. This decline signals a broader trend within the cryptocurrency market, with the CoinDesk 20 Index reporting a decrease of more than 3% across the top 20 cryptocurrencies.
Not only has Bitcoin taken a hit, but related stocks like Coinbase and MicroStrategy are also down. Omid Malekan, a professor at Columbia Business School, explained that such volatility is typical for Bitcoin, especially considering its rapid growth of around $30,000 in a short period. According to Malekan, these fluctuations are normal for Bitcoin during bull markets, and pullbacks are to be expected as the currency continues to climb.
While Bitcoin briefly reached an all-time high of $99,500 last week, leading to increased market liquidity, recent outflows from spot Bitcoin exchange-traded funds suggest a shift in demand. Despite this setback, Malekan believes that Bitcoin still has a chance to hit six figures by the end of the year, emphasizing the psychological significance of the $100,000 mark as a potential barrier to overcome.
Although Bitcoin has experienced a stumble this week, it remains up by 30% since the November 5th election, which reinstated former President Donald Trump. The crypto market has seen significant growth amid optimism for a regulatory shift in favor of cryptocurrencies under Trump’s administration. Additionally, the decision of Securities and Exchange Commission Chair Gary Gensler to step down on Inauguration Day has also contributed to Bitcoin’s recent climb towards $100,000.
In conclusion, while Bitcoin may be facing some challenges in breaking the $100,000 barrier, the overall market sentiment remains positive. As Malekan points out, fluctuations and pullbacks are part of Bitcoin’s normal behavior during bullish periods, and there is still potential for the currency to reach new heights in the near future.
