(Bloomberg) -- Bitcoin steadied after a rally toward $100,000 fizzled just shy of the historic level, as traders assess whether optimism stemming from President-elect Donald Trump’s support for crypto is becoming stretched.
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The digital asset fell as low as $94,598 on Monday after coming within $300 of the six-figure milestone on Friday. It was changing hands at around $95,039 as of 1:53 p a.m. Monday in New York, as Trump’s pick of hedge fund executive Scott Bessent for Treasury secretary helped sentiment in global markets.
The pullback comes even as Bitcoin proxy MicroStrategy Inc. announced that it bought a record $5.4 billion of the cryptocurrency last week. The software maker, which now calls itself a Bitcoin Treasury company, has acquired about $12 billion of the digital asset this month.
I “think most of the buying was last week, as Saylor announced,” said Shiliang Tang, president of crypto principal trading firm Arbelos Markets. The “US holiday week this week and [with the] lack of Saylor and other US buyers, [it’s] hard to keep markets up here.”
Data from tracker Coinglass shows that more than $60 million worth of bullish bets on Bitcoin were liquidated in the past 24 hours. “Markets were a bit stretched,” Tang said. “So definitely on way down, we’ll have more liquidations.”
Investors are worried Bitcoin “will have to take a breather now that it has basically tested the $100,000 level,” said Matt Maley, chief market strategist at Miller Tabak + Co, adding that bullishness around Bitcoin “is getting extreme.”
Trump’s incoming US administration is viewed as a crypto tailwind across Wall Street and beyond. The overall value of the digital-asset market has surged about $1 trillion since the Republican’s victory on Nov. 5.
Trump’s Agenda
Trump has promised friendlier regulations and pledged to set up a national Bitcoin stockpile, though the timeline for implementation and the feasibility of the Bitcoin reserve remain open questions.
“I’m seeing an increasing skew to the sell side as we near the $100,000 mark,” said David Lawant, head of research at crypto prime broker FalconX. “This suggests we may experience consolidation around this level in the near term before a sustained breakthrough above it.”
Traders had seized on the US crypto outlook to push Bitcoin to the verge of $100,000, a symbolic level that for crypto supporters repudiates skeptics who see little intrinsic value in digital assets.
Cantor Talks
The latest developments included a Bloomberg News report that Cantor Fitzgerald LP is in talks with Tether Holdings Ltd. about receiving support from the stablecoin issuer for Cantor’s planned lending program for clients who put up Bitcoin as collateral.
Cantor’s Chief Executive Officer Howard Lutnick is co-chair of Trump’s transition team and the president-elect’s pick to run the Commerce Department. The transition team has also held discussions over whether to create the first-ever White House post dedicated to digital-asset policy.
Cash has poured into US exchange-traded funds investing directly in Bitcoin since Trump’s win, and the products have now amassed $107 billion in assets.
“Bitcoin was extremely overbought since the election, it was bound to stall out,” said Stephane Ouellette, chief executive officer at crypto investment firm FRNT Financial Inc. “That said, this is barely a pullback, we’re just back at levels from mid-last week.”
--With assistance from Sidhartha Shukla and Muyao Shen.