Bitcoin momentum ebbs heading into last stretch of record year

BITCOIN is flagging in the last leg of a record-breaking year.

The digital asset changed hands at about US$94,500 early on Tuesday (Dec 24) in Asia, roughly US$14,000 below the all-time peak set on Dec 17. The cryptocurrency has dipped to its 50-day moving average, which some view as a reason for caution.

The test of the closely watched average warrants “a move back to a neutral bias” amid a “consolidation phase” for the token, Fairlead Strategies technical analyst Katie Stockton wrote in a note.

Bitcoin’s pullback reflects expectations of slower US Federal Reserve interest-rate cuts in 2025, an outlook that has tempered the speculative ardour generated by president-elect Donald Trump’s push for relaxed US crypto regulations. The Republican has also backed the idea of creating a national Bitcoin stockpile.

In the latest developments in the US, crypto-friendly Senator-elect Bernie Moreno was picked for the chamber’s banking committee. The digital-asset industry anticipates a boom based on the preponderance of crypto proponents in Trump’s incoming administration.

MicroStrategy purchases

Meanwhile, MicroStrategy announced it had purchased an additional US$561 million of Bitcoin at an average price near last week’s record high. That marked the seventh week in a row of purchases for the dot-com-era software maker turned leveraged Bitcoin proxy.

Trump used to be a digital-asset sceptic but pivoted as the sector spent big on promoting its interests during US election campaigning. Bitcoin has jumped approximately 40 per cent since he emerged victorious after Election Day on Nov 5 and set about undoing a Biden administration crypto crackdown.

US exchange-traded funds (ETFs) investing directly in Bitcoin have attracted more than US$12 billion of net inflows since Trump became president-elect. But the pace of subscriptions slowed lately, including the highest one-day outflow from the group of one dozen ETFs on Dec 19.

The largest digital asset has rallied 125 per cent so far this year, exceeding the returns from traditional investments such as global stocks and gold. A wider crypto market gauge, encompassing smaller tokens such as Ether and meme-crowd favourite Dogecoin, has also doubled. BLOOMBERG