Bitcoin Declines Nearly 7% as Traders Prepare for Market Setback -

Bitcoin faced a nearly 7% drop soon after its historic surge above $100,000, prompting some traders to anticipate a price correction.

The cryptocurrency fell to a low of $92,144 on Friday but later found support at $97,851 as of 6:05 a.m. in London. This volatility also spread across the broader cryptocurrency market, coinciding with a slowdown in the rally fueled by President-elect Donald Trump’s backing of the sector.

There has been an increase in interest for bearish positions, such as put options, which permit the holder to sell at a predetermined price within a specific timeframe. Noteworthy activity includes puts with strike prices of $95,000 and $100,000, according to Amberdata. Furthermore, interest in puts near the $75,000 and $70,000 levels has also grown.

“Although it appears there is still room for growth, it’s logical for investors to secure some profits,” explained Josh Gilbert, a market analyst at eToro. “Historically, during bull markets, Bitcoin prices have often seen pullbacks of 20% to 40%.”

Bitcoin, the leading digital currency, soared past the $100,000 threshold on Thursday amidst optimism that Trump’s appointment of a crypto advocate as the new head of the US securities regulator would further integrate the market into mainstream finance.

Trump has committed to undoing the Biden administration’s regulations on digital assets and aims to position the US as the global hub for cryptocurrency. He has even backed the controversial proposal of establishing a strategic national Bitcoin reserve, which was labeled as “crazy” by former US Treasury Secretary Lawrence Summers.

White House czar

Late Thursday in the US, Trump announced on Truth Social that David Sacks will act as the White House czar for artificial intelligence and the cryptocurrency industry. “He will create a legal framework to provide the crypto sector with the clarity it seeks, and foster its growth in the US,” Trump stated.

The president-elect’s support for cryptocurrencies is enhancing market sentiment, buoyed by $33 billion in net inflows into US Bitcoin exchange-traded funds this year. However, with the token rising 45% since Election Day on November 5, concerns about whether the rally may need to pause are surfacing.

“The recent surge in volatility appears to indicate a classic blow-off top,” observed Tony Sycamore, a market analyst at IG Australia Pty. “While we don’t consider this the conclusion of the Bitcoin bull run, it suggests we may be entering a consolidation phase in the upcoming days or weeks.”

Six-figure strikes

Other areas within the derivatives market reflect ongoing optimism extending into 2025. On the Deribit exchange, the highest open interest for options set to expire at the end of January consists of calls with strike prices of $110,000 and $120,000.

Options trading activity on BlackRock’s iShares Bitcoin Trust, the leading fund for the token, surged on Thursday, with over 400,000 calls traded compared to nearly 190,000 puts, based on data from Bloomberg.

Among the notable strategies, puts at $51 and $41 expiring on January 17 totaled nearly 34,000 contracts. Subsequently, May 16 exchanges of $58 calls and puts occurred in two opening blocks of 12,000 options each.

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