(Bloomberg) — could snap its longest winning streak in over four months. Traders question whether it was possible to bounce back too fast from recent lows. 

The world’s largest digital currency by market value lost as much as 2.1% on Tuesday to trade at $43,178 before turning mostly little changed. The index of 100 coins also fell 2.3%, while other tokens declined. 

It comes after a strong start to this week which saw Bitcoin surpass $44,000.

“Today’s pullback is due to some profit-taking after a big move,” said Matt Maley, chief market strategist at Miller Tabak + Co. “Bitcoin had rallied about 38% on an intraday basis in less than two weeks, so I think it’s just a matter of traders taking some short-term profits.” 

Bitcoin moved beyond its trendline since November highs. It has ample room to restrain its current advance in the near term without having to disrupt its progress, he said.

An analyst has noted that cryptos are moving with U.S. stocks and other riskier assets lately. According to Kraken’s report, this relationship was evident in January when both asset types saw high volatility. 

“With a hawkish shift from the Fed, continued omicron fears, lower stock valuations, and inflation fears at a multi-decade high, crypto remains vulnerable to derisking should equity markets correct in the coming month(s),” said the report.

Fairlead Strategies’ founder and managing partner Katie Stockton keeps track of a monthly MACD momentum indicator for Bitcoin. That measure had been showing a “buy” signal since July of 2020 but crossed over to “sell” at the end of January, she noted in Fairlead’s “Cryptocurrency Compass” report.

“It tells us that this year could see more volatility, and it means we need to be more short-term oriented when committing to long positions,” she said. 

Bitcoin’s advance in this week saw it rise above the 50-day moving mean. However, Bitcoin faced resistance at $45,000. That was the same area that Bitcoin crossed over the upper border of its trading envelope. This is a sign that the rally was too fast. 

“One of the things crypto does not have going for it is there may be a relatively fixed set of investors and those investors may be finding themselves expecting to be somewhat less liquid,” Brian Nick, chief investment strategist at Nuveen, said by phone. “There’s not going to be unlimited liquidity from the Fed anymore, and if we have the money-supply contracting, if we have interest rates rising, it will tend to make things like crypto less attractive.”

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