Bitcoin's March to $100,000 Has Stopped; Why?

Bitcoin has surged more than 30% since the U.S. election earlier this month, but has yet to break the psychological $100,000 mark. The world's most popular cryptocurrency hit an all-time high of around $99,617 last week, but has since started to decline, trading at $92,200 yesterday afternoon, according to data from Investing.com.

There are a few reasons why Bitcoin is holding back from breaking above $100,000, including profit-taking by big investors, according to analysts CNBC surveyed.

• Bitwise: "It seems to be more of a bull market correction than a trend change"

Andre Dragosch, head of European research at crypto asset manager Bitwise, says Bitcoin is likely failing to break the psychological barrier as investors book profits from the cryptocurrency's impressive rally following the U.S. election, the source said.

"Bitcoin has so far failed to break above $100,000 because long-term holders have started to distribute significant amounts during the recent rally," Dragosch wrote in a note published earlier this week.

He added that he expects Bitcoin's rally to "take a short-term break," but market sentiment remains positive, and "this appears to be a bull market correction rather than a trend change."

In his opinion, "Bitcoin valuations are far from overvalued." The supply reduction stemming from events like the so-called "halving" earlier this year - which halved the amount of Bitcoin issued that miners receive - will continue to support prices.

• Galaxy Digital: "There is a lot of leverage in the system"

Mark Novogratz, CEO of digital asset manager Galaxy Digital, believes that while hitting six figures after the election is "inevitable," a pullback was expected.

"There's a lot of leverage in the system right now," Novogratz told CNBC. "The crypto community is saturated with leverage, so a correction is going to happen."

The Galaxy Digital CEO urged investors to buy Bitcoin itself, rather than using other methods to gain exposure to the cryptocurrency, such as MicroStrategy, which owns billions of dollars worth of Bitcoin.

Novogratz also noted that an unknown seller has been acting in the market recently, which has put pressure on the price. "There was a huge seller in the last week, between 92, 93 and 94 (thousands of dollars). He sold probably $14 billion to $15 billion worth of Bitcoin there," Novogratz said.

• What's next?

David Morrison, senior market analyst at brokerage firm Trade Nation, says that while $100,000 is a "nice round number," he feels it has "become a big hurdle, if not a barrier, to further gains," according to CNBC.

"If Bitcoin starts to fade from here, then that could be all we get - especially if long-term investors decide to cash out early," Morrison said. However, he believes there is a "fairly high probability that the upward momentum could accumulate enough energy to spark a new rally," the publication also notes.

• Deutsche Bank: "Regulation is a net positive for the industry"

Marion Laboure, a strategist at Deutsche Bank, says that while Trump has announced his support for Bitcoin and the crypto industry, the prospect of concrete crypto legislation is remote.

Among Trump's pledges to support the industry are transforming the United States into a global crypto hub, creating a national strategic Bitcoin reserve, and replacing Securities and Exchange Commission Chairman Gary Gensler - who last week announced he would resign on January 20.

Laboure believes that major reforms will "require timely congressional approval, which makes these ambitious long-term goals more or less achievable; they also may bring some turbulence, which may not be in line with market expectations," the Deutsche Bank strategist told CNBC.

However, Laboure stressed that he sees the regulation as "a net positive for the industry," according to the publication.