The price of bitcoin price retreated further from the psychologically important $100,000 milestone, as investors booked profits from the token's post-U.S. election gains.
The largest cryptocurrency by market capitalization was last lower by more than 2% at $92,277.19, according to Coin Metrics. Earlier, it fell as low as $91,433.54. The CoinDesk 20, an index measuring broader crypto market performance, fell nearly 6%.
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With the bitcoin price regularly hitting new records, long-term holders have been selling in the spot market in increasing amounts. That sell pressure has so far been absorbed by inflows in to bitcoin ETFs, which ended a five-day streak Monday and logged $438 million in outflows, and large purchases by MicroStrategy. CryptoQuant typically defines long-term holders as entities that have held bitcoin for 155 days or more.
"Bitcoin has been on a tear since Election Day ... with very few pullbacks, but the $100,000 mark remains a formidable psychological barrier," Mati Greenspan, founder of Quantum Economics, told CNBC by email.
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"The community has been eyeing this significant psychological level for years, and while breaking through now would be a major bullish signal, a brief pullback may be needed to gather momentum before the next attempt."
Crypto infrastructure firm BitGo's Brett Reeves told CNBC that the primary reason behind the selling pressure this week was traders taking profits after the token's post-election rally.
"Historically, when new all-time highs are reached there is typically a period of consolidation before further moves up," Reeves told CNBC by email.
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"We know that new institutional money is coming into the space and retail activity is picking up, both via ETFs and exchanges. With positive macro and regulatory news ahead, we could see a quick pick up in price activity."
Despite the drop on Tuesday, bitcoin has risen more than 30% since the U.S. presidential vote of Nov. 5, which resulted in the election of former White House leader Donald Trump.
The Republican politician has not yet been inaugurated. However, optimism around Trump's pro-crypto policy platform in the leadup to the vote has reignited buzz for digital currencies.
Adding to optimism in crypto markets is the news that U.S. Securities and Exchange Commission Chair Gary Gensler, under whose leadership the agency took legal action against several major crypto firms, will resign on Jan. 20 — the day of Trump's inauguration. Trump had promised to replace Gensler at the agency's leadership.
