Bitcoin steadied below the $100,000 milestone after a rally that nearly breached the historic level fizzled, prompting traders to reassess whether optimism surrounding President-elect Donald Trump’s pro-crypto stance has been overextended.
The digital asset dipped to $94,598 on Monday after coming within $300 of six figures last Friday. By 1:53 a.m. in New York, Bitcoin was trading at approximately $95,039. Market sentiment received a boost from Trump’s selection of hedge fund executive Scott Bessent as Treasury Secretary, which has buoyed global markets.
Despite this pullback, Bitcoin proxy MicroStrategy Inc. announced a record-breaking purchase of $5.4 billion in Bitcoin last week, bringing its total acquisitions this month to about $12 billion. The software maker, which now brands itself as a Bitcoin Treasury company, continues to be a significant institutional player in the digital asset space.
Market Exhaustion Sets In
“Most of the buying likely occurred last week following MicroStrategy’s announcement,” said Shiliang Tang, president of crypto trading firm Arbelos Markets. “With the U.S. holiday week upon us and the absence of significant U.S. buyers like Michael Saylor, it’s hard to sustain market momentum at these levels.”
Data from crypto analytics firm Coinglass revealed that more than $60 million in bullish Bitcoin bets were liquidated over the past 24 hours, signaling stretched market conditions. “Liquidations on the way down will likely continue,” Tang noted.
Market strategists agree that Bitcoin faces near-term resistance as it hovers near the psychologically significant $100,000 mark. “The digital asset may need to take a breather after testing this level,” said Matt Maley, chief market strategist at Miller Tabak + Co. “Bullish sentiment has reached an extreme.”
Optimism Fueled by Trump’s Crypto Agenda
Trump’s incoming administration has been perceived as a tailwind for cryptocurrencies. Since his election victory on November 5, the total value of the digital asset market has surged by nearly $1 trillion. Trump has pledged friendlier crypto regulations, including the establishment of a national Bitcoin reserve, though timelines and feasibility remain uncertain.
David Lawant, head of research at crypto prime broker FalconX, observed increasing sell-side pressure as Bitcoin approached $100,000. “We’re likely to see some consolidation around this level before a sustained breakout occurs,” he said.
The rally to $100,000 has been driven by growing optimism over U.S. crypto policy under Trump, a development that crypto advocates view as a repudiation of skeptics who question Bitcoin’s intrinsic value.
Institutional Support Strengthens
Further bolstering market sentiment, Cantor Fitzgerald LP is reportedly in discussions with Tether Holdings Ltd. regarding support for a planned lending program. The program would allow clients to use Bitcoin as collateral. Cantor CEO Howard Lutnick, a co-chair of Trump’s transition team and his pick for Commerce Secretary, is at the forefront of these efforts.
Additionally, Trump’s transition team is considering creating a dedicated White House position for digital asset policy, signaling further institutional adoption. Meanwhile, cash has flooded into U.S. exchange-traded funds (ETFs) directly investing in Bitcoin. These ETFs have accumulated $107 billion in assets since Trump’s election win.
A Healthy Correction?
While the pullback has dampened Bitcoin’s momentum, market participants see it as a natural consolidation. “Bitcoin was extremely overbought following the election, so some stalling was inevitable,” said Stephane Ouellette, CEO of crypto investment firm FRNT Financial Inc. “This isn’t a significant correction—we’re merely back at last week’s levels.”
Despite the retreat, the broader crypto market remains energized by the prospect of more supportive regulations under the new administration. As Bitcoin continues to stabilize, wealth advisors and RIAs should monitor these developments closely, keeping clients informed about potential opportunities and risks in the evolving digital asset landscape.
