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(Bloomberg) -- Bitcoin took a breather after topping $108,000 for the first time as traders await an expected Federal Reserve interest-rate cut and assess a wave of optimism from President-elect Donald Trump’s support for crypto.

The largest token touched $108,315 on Tuesday before falling back to $104,775 as of 7:33 a.m. Wednesday in New York. The overall value of digital assets came within a whisker of $4 trillion during the earlier rally, data compiled by CoinGecko show.

Trump has promised friendly regulations to allow the US to dominate the crypto sector and even backed the idea of a strategic national Bitcoin reserve. MicroStrategy Inc.’s upcoming inclusion in the Nasdaq 100 Index added to the positive mood by opening up the possibility of more share-price gains for a company whose main activity is raising capital to invest in Bitcoin.

The Fed is widely expected to implement another quarter-point rate cut on Wednesday but there is less clarity on the policy outlook next year due to robust US economic growth and inflation risks from Trump’s wider agenda.

“We expect this week’s FOMC to contribute to the market’s volatility,” K33 Research analysts Vetle Lunde and David Zimmerman wrote in a note, referring to the Fed’s final monetary policy meeting of 2024. “Following the FOMC, quiet macro weeks await, potentially setting the stage for Bitcoin momentum to further materialize during the holiday season.”

Bitcoin is up more than 55% since Trump’s victory in the presidential election on Nov. 5. Investors have flocked to US exchange-traded funds for the original cryptocurrency, setting aside warnings about the token’s history of volatility, signs of stretched momentum and crypto’s lack of traditional valuation tethers.

On the Deribit options exchange, one of the biggest crypto derivatives platforms, the highest concentration of open interest for bullish wagers is at the $120,000 strike price. Open interest is the number of outstanding contracts.

There are reasons to be “cautious about chasing Bitcoin” at current levels, such as the round-trip in its price on Tuesday to the starting level of about $106,000 despite the intraday jump to an all-time peak, according to IG Australia Pty Market Analyst Tony Sycamore.