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(Bloomberg) -- After a strong start to the new year that saw Bitcoin retake the $100,000 level, the original digital asset fell on Thursday to its lowest level this year as it struggles to maintain momentum.
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Bitcoin fell as much 2.8% to $91,785 on Thursday, down sharply from a high of $102,733 on two days earlier and about 15% below its all-time record of $108,315 set in mid-December.
Investors withdrew a net $583 million from US Bitcoin exchange-traded funds on Wednesday, the second highest outflow from the group since they debuted a year ago.
The success of those ETFs coupled with President-elect Donald Trump’s outspoken support for the digital-assets industry lifted Bitcoin to new heights in 2024, but the rally has stalled since the start of the year. US economic data released on Tuesday further tempered expectations for imminent Federal Reserve rate cuts, putting pressure on risky assets.
Nick Forster, founder of crypto trading platform Derive.xyz, said downside protection in the form of put options are currently in demand among traders, with the market expecting heightened volatility, “possibly due to concerns about potential corrections.”
The Federal Reserve’s hawkish guidance is contributing to Bitcoin prices staying between $91,000 and $102,000, Peter Chung, head of research at Presto Research wrote in a note to clients.
“A breakout will happen when the market completes its re-calibration process and uncertainty clears,” Chung wrote. “Signals for this will likely emerge after Trump’s Jan. 20 inauguration and gradually take shape during his first 100 days in office.”
US stock market trading is halted on Thursday due to the funeral of former President Jimmy Carter. The lack of trading is likely to reduce activity and liquidity.
(Updates with price move and additional commentary.)
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