Bitcoin sinks below $34,000 as sell-off cuts into early-January momentum

Bitcoin sinks below $34,000 as sell-off cuts into early-January momentum

REUTERS/Stephen Lam

Bitcoin sank as low as $33,412.72 on Wednesday as investors continued to take profits from the cryptocurrency's massive rally.

The token reached a record of nearly $42,000 earlier this month before momentum stalled.

Analysts see $34,000 as a key support level for the token, while a move above $40,000 could revive bitcoin's rally.

Watch bitcoin trade live here.

Bitcoin tumbled below the key $34,000 level on Wednesday as selling continued to drag the largest cryptocurrency below key support levels.The token slid as low as $33,412.72 before paring some losses. Bitcoin traded at $34,295.70 as of 11:45 a.m. ET Wednesday, down roughly 7.8% from 24 hours ago. The cryptocurrency has fluctuated around the $35,000 level in recent trading days as momentum from its recent rally stalls.Bitcoin climbed to a record of nearly $42,000 earlier this month as institutional and retail investors alike piled into the cryptocurrency market. The token's rapid ascent quickly gave way to profit-taking and prices have since struggled to rise back above $40,000. Still, the cryptocurrency sits about 16% higher year-to-date.Strategists have regarded the $40,000 level as critical to bitcoin's next rally. JPMorgan strategist Nikolaos Panigirtzoglou said in a Friday note that investors will likely continue to exit their bitcoin positions unless the token retakes the support level. Flows into the Grayscale Bitcoin Trust and futures contracts can serve as early indicators of whether such support can be reached, he added.
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