Over the past five days, I’ve noticed a significant drop in the price of Bitcoin (BTC). It dipped to approximately $94,000 on January 11, marking an 8.5% decrease from its local peak of over $102,000, which was reached on January 7.
At the moment, Bitcoin’s price is lower than its 20-day moving average, indicating that at present, it seems the sellers have the upper hand. The price has also been experiencing a period of stability since December 19, 2024.
Currently, the Relative Strength Index (RSI) stands at 45, indicating that it’s not in an extreme state of either being oversold or overbought. However, there’s been a significant drop of more than 20% from its level on January 6th.
Some financial experts predict that the price of Bitcoin and other cryptocurrencies might experience a decrease in value around President-elect Trump’s inauguration on January 20th. This is because investors may choose to sell their holdings as they view this event as an opportunity to cash out, or if the anticipated pro-cryptocurrency legislation does not materialize.
President-elect Trump’s inauguration may trigger sell-off
In an article dated December 17th, Arthur Hayes, a co-founder of BitMEX and analyst, advised cryptocurrency investors to be wary, suggesting that the election of Donald Trump as U.S. President might lead to a widespread selling across the market.
Hayes stated that if the second Trump administration had pro-crypto and pro-business policies, investors would swiftly sell off their cryptocurrency and stock investments that they bought under the assumption those policies would be implemented.
The analyst suggested that if investors understood that policies can take a significant amount of time to enact and that President Trump needs to get favorable laws passed within a year, this understanding could lead to a huge wave of selling off their investments.
On the other hand, Hayes expressed optimism about the future price of Bitcoin, attributing his viewpoint to broader economic issues such as increasing global government debt and devaluation of currencies across the globe.
A possible boost in liquidity of approximately $612 billion by the U.S. Federal Reserve might offset any regulatory letdowns from the Trump administration, potentially pushing Bitcoin‘s price upward during the first quarter of 2025.
Hayes’ warning was echoed by CryptoQuant CEO Ki Young Ju in a December 2024 social media post.
Ju suggested that Trump’s stance towards cryptocurrencies could be influenced by the state of the U.S. economy and the strength of the U.S. dollar.
The CEO stated that the U.S. dollar is presently growing in power as a secure investment option, being valued globally as a place to hold wealth.
Personally speaking, given Donald Trump’s stance on fortifying the U.S. dollar and his approach to foreign trade, it seems unlikely that he would set up a strategic Bitcoin reserve, as I perceive it.
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2025-01-11 22:42