Bitcoin, XRP Drop as Crypto Rally Fades. Why Traders Have Turned Cautious. — Barrons.com

By Elsa Ohlen

The price of Bitcoin was falling as the crypto's weeklong rally faded amid profit-taking and uncertainty about the longevity of recent gains.

Bitcoin dropped 4.9% over the past 24 hours to $116,658, according to CoinDesk data. It hit a fresh record high above $122,000 in the early hours of Monday but started to fall later in the day as traders locked in profits.

"The tone has shifted from clear breakout to something more cautious, and traders are on the lookout for a pullback/pause," wrote Tom Bruni at Stocktwits late Monday. He still sees the bigger trend as intact and said this could be the start of a "pause that refreshed" before Bitcoin and the broader crypto market start their next legs higher.

The price of Bitcoin has risen about 7% over the past seven days and is up 23% so far this year.

Altcoins were also falling early Tuesday. Ether was down 2.1% while XRP dropped 4.1%, according to CoinDesk. Solana was down 4.9% while Dogecoin led losses among large altcoins, down 7.4%.

Yesterday was the start of so-called "Crypto Week," as it has been called by the White House, during which the House of Representatives will consider three pieces of legislation that aim to regulate the crypto industry.

All major cryptocurrencies have made gains over the past seven days amid hope that the measures will provide structure to the sector that ultimately will lead to larger inflows into digital assets.

Crypto-linked stocks followed a similar pattern as tokens and dropped early Tuesday following big gains.

Bitcoin-buyer MicroStrategy dropped 2.4% in premarket trading, while crypto exchanges Coinbase Global and Robinhood fell 1.6% and 0.7%, respectively.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

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