Crypto is taking a breather from the election recovery, Bitcoin is nearing $90,000

The crypto market has paused in its rapid run that began a week ago after the US election, but investors should expect it to pick up again.

On Tuesday Bitcoin It fell 1% to $87,440.88, according to Coin Metrics. On Monday, it rose more than 10% overnight to as high as $89,623.00. Many investors expect the price to hit new records and reach $100,000 later this year.

Bitcoin is up more than 26% since Election Day on November 5, when it hit a new record for the first time since March. ether fell 3% on Tuesday after rising 33% last week.

“Bitcoin is now in price discovery mode after breaking all-time highs early Wednesday morning when it was officially declared that Trump won the election,” said Mike Colonnese, analyst at HC Wainwright. “The strong positive sentiment is expected to continue until the end of 2024 [we] We expect Bitcoin prices to potentially reach the six-figure mark by the end of this year.

Crypto investors have cheered President-elect Donald Trump's promises to make the regulatory environment more supportive and even friendly for crypto companies, which have long struggled with a lack of clarity in the rules of the road.

While Bitcoin has long been considered a safe asset in Washington – meaning it is not subject to securities laws – the other cryptocurrencies and crypto-related startups operate in a riskier gray area.

“This has just shifted 180 degrees,” Matt Hougan, chief investment officer of Bitwise Asset Management, told CNBC. “We're now in a positive regulatory environment that's giving us tailwinds, and that's coming in the case of a market that was already in a bull market… that's going to push us higher.”

Across the crypto market on Tuesday, coins that had risen sharply over the past week hit the brakes, including the Shiba Inu memecoin, which fell 4% after rising 57% over the past week.

Dogecoin however, was an outlier. It is one of the biggest gainers, up more than 135% since November 5, likely due to its connection to Elon Musk, who helped get Trump elected. Most recently it was 14% higher.

On the stock market, Coinbase And Microstrategy each fell by around 6% in premarket trading. In regular trading on Monday, Coinbase rose 19% to trade above $300 for the first time since 2021 and about 6% away from its peak this year.

Traders and analysts agree that last week's rally is just beginning.

“It seems like there is an air gap between the previous one [bitcoin] “It's hard to see exactly what would compel sellers to enter this market and stop the momentum before we reach that level.” Of course, there are no guarantees. There have been setbacks, but we are in a new crypto market cycle. … I think we are right to be optimistic and that the trend is still upward.”