Bitcoin (BTC) price falls as post-election recovery loses momentum

Bitcoin price continued to fall from the psychologically important $100,000 mark as investors booked profits from the token’s gains following the US election.

The world’s largest cryptocurrency by market cap was trading down 5.9% at $92,313.34 as of 7:12 a.m. ET, according to data from CoinGecko.

Other tokens were also in the red. Ether, the second largest coin, fell 4.4% to $3,330.29, while Solana’s Sol token fell 9.3% to trade at $228.31.

Total crypto market cap – calculated by multiplying total coins in circulation by price – fell by $182 billion to $3.35 trillion.

“Bitcoin has been on a tear since Election Day… with very few pullbacks, but the $100,000 level remains a formidable psychological barrier,” Mati Greenspan, founder of Quantum Economics, told CNBC by email.

“The community has been eyeing this significant psychological level for years, and while a breakout now would be a major bullish signal, a short pullback may be needed to gain momentum before the next attempt.”

Brett Reeves of crypto infrastructure company BitGo told CNBC that the main reason for the selling pressure this week was traders taking profits following the token’s post-election rally.

“Historically, when new all-time highs are reached, there is typically a period of consolidation before further upside,” Reeves told CNBC by email.

“We know that new institutional money is flowing into the space and retail activity is increasing, both across ETFs and exchanges. Given the positive macroeconomic and regulatory news ahead, we could see a quick pick-up in price activity.”

Despite Tuesday’s decline, Bitcoin is up more than 30% since the November 5 US presidential election, which resulted in the election of former White House Chairman Donald Trump.

The Republican politician has not yet been sworn in. However, optimism surrounding Trump’s crypto-friendly policy agenda ahead of the vote has reignited enthusiasm for digital currencies.

Adding further optimism to the crypto markets was the news that US Securities and Exchange Commission Chairman Gary Gensler, under whose leadership the agency has taken legal action against several major crypto firms, on January 20 – the day of Trump’s inauguration – will resign. Trump had promised to replace Gensler at the top of the agency.