Bitcoin price dips below US$80,000 as the token trades in a narrow range

The token had traded in a narrow range near US$95,000 for most of the month before this week, after reaching a record of about US$109,000 on Jan. 20.

The price of Bitcoin has slid amid a broader selloff in technology stocks and disappointment over the lack of major crypto-related announcements from the White House, according to analysts.

The token had traded in a narrow range near US$95,000 for most of the month before this week, after reaching a record of about US$109,000 on Jan. 20.

“We are observing a notable reversal of the post-election market dynamics that had initially been driven by expectations of a pro-business, pro-market administration following candidate Trump’s victory,” said Raphael Thuin, head of capital market strategies at Tikehau Capital SCA. “Bitcoin’s struggles are further complicated by broader weakness in the tech sector.”

There is risk that Bitcoin prices can go lower to the mid-US$70,000 level, according to Paul Howard, senior director at market maker Wincent, adding that Trump’s crypto-related announcement have disappointed some traders.

“What’s been driving this is the lack of positive executive-order news some pundits were expecting, and U.S. inflation numbers,” he said.

To be sure, the recent exodus of funds from spot-Bitcoin ETFs represents only about three per cent of the total assets they hold. And some of the outflows likely stem from hedge funds unwinding a popular trading strategy called the basis trade, which exploits differences in prices between spot and futures markets. Some have also used the ETFs to profit from the cryptocurrency’s volatility or offset a short position in derivatives.