Bitcoin's meteoric rise has finally hit a speed bump after briefly touching $93,500 following U.S. inflation data and some people deciding to take some profit.

The most popular cryptocurrency had been on a tear since the beginning of November. This was due to a number of factors, including traders’ hope that Donald Trump would win the election and the expectation that he would make crypto regulations more favorable. 

But after the most recent U.S. inflation numbers came out, which showed that consumer prices went up 0.2% in October and that the annual inflation rate was 2.4%, the market's mood changed a little.

Recent data on inflation has made people worry that the Federal Reserve might keep lowering interest rates to deal with persistent inflationary pressures. Lowered interest rates often lead to more money being available to invest in high-risk assets. So this could be seen as good for risky assets like Bitcoin in the long run. 

But since prices have gone up so quickly, it makes sense for some traders to lock in their gains. Chris Weston of Pepperstone Group noted:

After such an extended move it's reasonable to think we will see opinions shift, resulting in increased two-way flows.

Bitcoin soared to an all-time high of $93,469 on November 13, marking a more than 40% increase since mid-October. The cryptocurrency’s rapid ascent was fueled by a surge in demand from both retail and institutional investors, who have increasingly viewed Bitcoin as a hedge against inflation and economic uncertainty. However, as Bitcoin approached the psychologically significant $100,000 mark, profit-taking began to set in.

According to data from Glassnode, realized profits during this rally have been substantial but still remain below historical peaks. This suggests that while some investors are cashing out, many are still holding onto their positions in anticipation of further gains. 

Glassnode reported that whales have already taken around $5.4 billion in profits in yesterday alone. But this is only about half of what was seen during previous all-time highs.

Even though profit-taking has been pretty slow compared to previous cycles, the recent slowdown shows that some traders are becoming more careful. Cory Klippsten, CEO of Swan Bitcoin, noted that it was “spectacular” that Bitcoin managed to hold its price level after such a significant rally on relatively weak trading volume. This suggests that even though prices are high, there is still a lot of demand for Bitcoin.

However, Bitcoin is currently trading around $88,000, and analysts are keeping a close eye on it to see if it can keep going up or if it will have a bigger drop. Some people in the market think Bitcoin could still reach $100,000 before the end of the year, but others are warning that too much debt in the market could make it more volatile.

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