Bitcoin Slides to $92,000 Amid Ongoing Profit-Taking by Long-Term Holders

As the year ends, macroeconomic worries and extensive profit-taking are placing a strain on the cryptocurrency market.

The crypto market is experiencing a rough Monday, driven by weak U.S. economic data and a surge in profit-taking. Bitcoin (BTC) has dropped 1.8% in the past 24 hours, falling to $91,800, a level not seen since Dec. 5, when it first crossed the $100,000 mark. The leading cryptocurrency has now fallen more than 14% from its all-time high of $108,278 on Dec. 17.

Ether (ETH) has had a smaller dip, losing 0.7% to settle at $3,320, yet it remains 17% below its peak earlier in December and has still not managed to break its 2021 high of $4,820. Solana (SOL) is proving more resilient than Bitcoin, with its SOL/BTC ratio gaining 0.35% today.

The CoinDesk 20 index, which tracks the top 20 cryptocurrencies by market cap (excluding stablecoins, memecoins, and exchange tokens), has also seen declines, dropping 3.74%. Ripple (XRP) and Stellar (XLM) are the biggest losers, falling 6% and 6.3% respectively, while Litecoin (LTC) has held up better, only down by 1.9%.

Crypto-related stocks have also been hit. MicroStrategy (MSTR) fell 7%, Coinbase (COIN) dropped 5.3%, and prominent bitcoin mining firms like MARA Holdings (MARA) and Riot Platforms (RIOT) each lost more than 7%.

The market’s current selling pressure is largely attributed to profit-taking, as many investors cash out following Bitcoin’s impressive 117% rise this year. The seven-day moving average of profit-taking has surpassed $1.2 billion, though it is still well below the peak of $4.0 billion on Dec. 11. Despite the decline in profit-taking volume, it remains significantly higher than usual, with long-term Bitcoin holders making up the majority of those realizing gains.

Macroeconomic concerns are also contributing to the market’s struggles. The U.S. Chicago PMI, a gauge of manufacturing and non-manufacturing activity in the Chicago area, posted its lowest reading since May, indicating potential economic slowdown.

Additionally, uncertainty surrounding the Federal Reserve’s interest rate policy into 2025 is weighing on the market, with the central bank signaling that rate cuts are unlikely until at least March. The upcoming inauguration of President-elect Donald Trump on Jan. 20 could also be affecting sentiment, with the S&P 500, Nasdaq, and Dow Jones all seeing declines of over 1%.

“2024 exceeded market expectations, but signs of fatigue suggest the market needs to consolidate,” said Joe Carlasare, a partner at Amundsen Davis. “As we look toward 2025, I remain optimistic, though I expect the market path to diverge from consensus, as it often does. Bitcoin adoption continues to rise, and I expect it to align more closely with traditional markets. If the U.S. can avoid a significant slowdown, Bitcoin should perform well, but it will likely experience more volatility than in 2024.”