Leading cryptocurrencies simmered down Monday after a smashing rally even as speculations around a U.S. strategic Bitcoin reserve gathered steam.

What Happened: The world’s largest cryptocurrency broke beyond $107,000 for the first time this afternoon before profit-taking brought it back to $105,000, with a modest increase to $106,000 by evening.

The sentiment was upbeat following reports that President-elect Donald Trump might pass an executive order to create a national Bitcoin stockpile.

Bitcoin was already up 9.11% in December, higher than the historical average of 5.75%, per Coinglass data.

A similar pattern followed for Ethereum, which failed to decisively break over $4,000 and fell to the upper $3,900 range.

In the past 24 hours, 119,098 traders were liquidated, with the total liquidations at $371.44 million. Longs accounted for 60% of the liquidations.

Over 61% of traders on Binance with open Bitcoin futures positions were short, as per the Long/Short Ratio, suggesting expectations of a pullback.

A rally to $110,000 would wipe out over $500 million worth of short positions, data showed. 

The bearish positioning could be due to the “Extreme Greed” sentiment in the market, per the Cryptocurrency Fear & Greed Index.

Top Gainers (24-Hours)

The global cryptocurrency market capitalization stood at $3.71 trillion, following a marginal increase of 0.11% over the last 24 hours.

Stocks were a mixed bag on Monday. The Dow Jones Industrial Average fell for the eighth consecutive day, dropping 110.58 points, or 0.25%, to close at 43,717.48. The S&P 500 rose 0.38% to 6,074.08, while the Nasdaq Composite surged 1.24% to close at a record high of 20,173.89.

The tech surge was powered by the “Mag 7” stocks, as Tesla Inc. (NASDAQ:TSLA) and Apple Inc. (NASDAQ:AAPL) notched their all-time highs during the session.

The rally came just ahead of the Federal Open Market Committee’s two-day meeting to decide on the benchmark interest rates. Market participants have priced in a 95% chance of a 25 basis point cut from the current target range of 450-475, according to the CME FedWatch tool.

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Analyst Notes: Well-known cryptocurrency analyst Ali Martinez sent a cautionary note to investors amid Bitcoin’s upsurge.

“I’m holding tight to my HODL bag, but my trading account is 30% cash as market sentiment around Bitcoin hits ‘extreme greed’—a cautionary red flag,” the analyst remarked. 

Another widely followed analyst, Michaël van de Poppe, foresaw a “ton of volatility” in the market due to the upcoming Fed meeting.

“I won’t be surprised we’ll see $110,000 and $95,000 in the same week,” Van de Poppe made his predictions.

Image via Shutterstock

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