Bitcoin retreats from record highs to test sub-$94,000 levels, then rebounds
2024-12-06

Bitcoin prices saw a sharp fall from its record levels to slip below $94,000 before bouncing back towards $97,000 on December 6, a day after historic highs. The market capitalisation of Bitcoin too shrunk back to $1.93 trillion.
The fall was in line with the dip in US equities, as the Dow gave up more than half a percent, with S&P 500 and Nasdaq also ending lower. Shares of MicroStrategy, the largest corporate holder of bitcoin, ended nearly 5% lower.
Earlier, Bitcoin had topped $100,000 after President-elect chose Paul Atkins as his nominee for the SEC chair, who is known to be less aggressive on crypto regulations. Since Trump's election victory, the price of Bitcoin has risen by around 45%, largely powered by money finding its way into bitcoin-backed exchange-traded funds in US.
"Roughly 3% of the total supply of bitcoins that will ever exist have been purchased in 2024 by institutional money," Geoff Kendrink of StanChart London told Reuters.
"..this doesn't mean BTC will rally forever, as there will be moves to take profits," Reuters quoted Shoki Omori or Mizuho Securities. "I think if Bitcoin were to rally more from here, other crypto majors should catch up a bit first, such as Ethereum. Ethereum looks cheap against Bitcoin," Shoki added.
Read More: Bitcoin crossing $100,000 an inflection point, says Aptos co-founder Avery Ching
Some market participants believe the real test of strength in Bitcoin's rally will come when there is a risk-off trade and global sentiment sours to trigger a stock market correction.
A Bloomberg News report showed that the demand for put options in Bitcoin have now increased, indicating a pursuit to lock in some of the gains at higher prices in case of a sharp retreat. Puts with $95,000 and $100,000 strike prices saw largest open interest positions, while demand for $75,000-70,000 puts have also increased, the report said.Put options are contract that gives the buyer the right to sell at an agreed price within a fixed period.