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The crypto market on Tuesday hit pause on its rocket rally that began a week ago following the U.S. election, though investors should expect it to pick up again.
The price of bitcoin was last higher by 2% at $89,338.20, according to Coin Metrics. Earlier, it rose as high as $89,983.00, after blowing through the $80,000 level over the previous two days. Its price is expected by many investors to continue making fresh records on its way to $100,000 later this year.
Bitcoin has now risen more than 32% since election day on Nov. 5, when it had reached a new record for the first time since March. Ether was down 1% Tuesday after a 28% gain over the past week.
“Bitcoin is now in price discovery mode after breaking through all-time highs early last Wednesday morning when it was officially declared that Trump won the election,” said Mike Colonnese, an analyst at H.C. Wainwright. “Strong positive sentiment is likely to persist through the balance of 2024 and [we] see bitcoin prices potentially reaching the six-figure mark by the end of this year.”
The crypto market hit pause after bitcoin’s rally toward $90,000 over the past week
Crypto investors have been cheering President-elect Donald Trump‘s promises to make the regulatory environment more supportive and even friendly toward crypto businesses, which have long struggled with a lack of clarity of the rules of the road.
While bitcoin has long been deemed a safe asset in Washington – that is, not subject to securities laws – the long tail of cryptocurrencies and crypto-related startups have been operating in a riskier grey area.
“That’s just shifted 180 degrees,” Matt Hougan, chief investment officer of Bitwise Asset Management, told CNBC. “We’re now in a positive regulatory environment, we now have tailwinds from that, and that comes in the case of a market that was already in a bull market … that’s going to push us higher.”
Across the crypto market, coins that have soared in the past week hit the brakes on Tuesday, including memecoin Shiba Inu, which was down 4% after it soared 57% in the past week.
Dogecoin was an outlier, however. It’s been one of the biggest winners, up more than 125% since Nov. 5, likely due to its connection with Elon Musk, who helped get Trump elected. It was last higher by 17%.
In the stock market MicroStrategy was flat and Coinbase retreated 4%. On Monday, Coinbase surged 19% to trade above $300 for the first time since 2021 and about 6% from its high from that year.
Traders and analysts agree the past week’s rally is only beginning.
“It does seem like there’s an air gap between the previous [bitcoin] all-time highs around $72,000 and $100,000,” Hougan said. “It’s hard exactly to see what would force sellers to come into this market and halt the momentum before we get to that level. Of course, there are no guarantees. You could see pullbacks, but we’re in a new crypto market cycle. … I do think that we are right to be bullish and the bias is still on the upside.”
