Analysis: The recent decline in Bitcoin is a much-needed correction to eliminate overbought, not a reversal downward

Bitcoin is on track for its longest losing streak since Trump won the U.S. election. As of Monday, Bitcoin had fallen about 6% for three consecutive days. The cryptocurrency market has grown by $1 trillion since Election Day on November 5, but is also stagnating. The difficulty of Bitcoin's first attempt to break through $100,000 "may convince traders that the market has peaked and profits should be locked now," wrote Noelle Acheson, author of the "Crypto Is Macro Now" newsletter. But she added that any such event should be "short-lived." "People have been looking for reasons to take profits," said Adrian Przelozny, CEO of cryptocurrency exchange Independent Reserve. "We remain very confident that the current bullish market sentiment will continue into 2025." In addition, TD Cowen analyst Jaret Seiberg said in a research note that Trump "will immediately gain control of the U.S. SEC" after his inauguration on January 20, adding that this would be "a positive signal in terms of relaxing cryptocurrency enforcement and promoting compliance." More than $7 billion poured into U.S. spot Bitcoin ETFs after the election, and those ETFs now have a combined $105 billion in assets. IG Australia Pty market analyst Tony Sycamore said the recent Bitcoin pullback was “a much-needed correction to remove overbought readings, rather than a reversal lower or anything sinister,” adding: “It’s also a reminder that markets, even crypto markets, don’t move in a straight line indefinitely.” (Bloomberg)