Bitcoin flirted with the $100,000 mark, coming within less than $1,000 of that psychological threshold. However, it failed to breach this peak, falling back to as low as $90,702. on Tuesday 26th November 2024. It has since rallied, trading at approximately $96,697 early on 29th November 2024. But still off the $100,000 barrier.
Investors taking profits
One factor contributing to the fall was investors capitalising on Bitcoin’s exceptionally high price, which increased the supply of Bitcoin. Long-term holders began to release substantial quantities of Bitcoin during the recent surge.
However, there are deeper reasons why some strategists remain uncertain about Bitcoin’s ability to reach the six-figure milestone. The $100,000 mark seems to have become a significant obstacle, if not an outright barrier, to further increases.
Leveraged to the hilt
Indeed, the recent surge in Bitcoin’s value could be instilling a misleading sense of confidence among investors. Viewing Bitcoin as a speculative bet or a means to achieve returns, it appears that investors are flocking to Bitcoin primarily for potential capital gains rather than its intrinsic value or practical applications.
The recent introduction of options for spot Bitcoin exchange-traded funds could be influential. Options provide investors with a way to speculate on Bitcoin’s price fluctuations without the need to invest in Bitcoin directly.
It’s leveraged to the hilt and there most likely will be a correction anytime soon.
That being said, a correction does not equate to lasting deflation. Should even a portion of U.S. President-elect Donald Trump’s commitments to the cryptocurrency sector materialise, the $100,000 mark might not represent a peak, but merely another milestone that Bitcoin surpasses during its triumphant ascent.
But remember, in my opinion and for what it’s worth – it is just a punt, not an investment.
Bitcoin one-day chart as of 29th November 2024 (11:16 am)
