Bitcoin Price Analysis: BTC’s First Week in the Red Since Trump Victory

Bitcoin (BTC) has recorded its first weekly decline since Donald Trump’s election victory, dropping more than 9% over the past seven days. The decline comes as the Federal Reserve’s cautious policy outlook tempers the cryptocurrency market’s recent euphoria.

Bitcoin Price Analysis: BTC's First Week in the Red Since Trump Victory
Bitcoin price analysis

Bitcoin’s Current Market Dynamics

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Currently trading at about $95,000, Bitcoin BTC/USD is on a clear retreat from its previous all-time high of $108,300 attained on December 17. With smaller tokens like Ether and Dogecoin witnessing total losses of about 10%, the wider bitcoin market has seen an even more dramatic drop.

Institutional Interest and Corporate Treasury Plans

Leading corporate Bitcoin holder MicroStrategy has sharply raised its purchases of the cryptocurrency, exceeding their levels from the 2021 bull market. The corporation just made its biggest single purchase of 55,500 BTC at almost $97,000 per coin, proving ongoing institutional trust in the asset in face of market volatility.

Political and Economic Implications

Proposed in Senator Cynthia Lummis’s bill, the possible creation of a U.S. Bitcoin reserve might have broad ramifications. According to VanEck’s projections, by 2049 such a reserve may help to lower the U.S. national debt by almost 35%. With Strike founder and CEO Jack Mallers speculating Trump may issue an executive order on his first day in office designating Bitcoin as a reserve asset, the incoming Trump government has shown possible support for Bitcoin as a reserve asset.

BTC/USD Technical Analysis

BTC/USD

 

According to market intelligence firm Santiment, social media opinion of Bitcoin has dropped to its lowest level of 2024. According to platform data, loud traders are showing “severe FUD” (Fear, Uncertainty, and Doubt), with the ratio of positive to negative Bitcoin-related remarks declining to around 4:5. Given markets usually move in the opposite direction of retail traders’ expectations, Santiment’s contrarian research suggests this strong negative attitude may really be a positive indication.

Technical patterns of Bitcoin help to justify this sentiment analysis. Mirroring the trend seen right before Trump’s election triumph, which followed a notable price surge, the bitcoin has generated three consecutive red daily candles for the first time since early November.

Bitcoin’s Short-Term Price Outlook

Popular analyst Elja Boom has found developing fractals on the daily chart that point to Bitcoin perhaps getting ready for a near-term comeback above $100,000. Rekt Capital, a crypto analyst, points out, meanwhile, that the present correction may last Week 8 of the cycle depending on past data from 2017 and 2021 bull markets. Currently moving from Week 7 to Week 8, Bitcoin suggests possible ongoing volatility before a consistent comeback.

Bitcoin’s Long-Term Price Prediction

Looking ahead to 2025, Matrixport, a provider of crypto services, forecasts Bitcoin to surpass $160,000 citing better macroeconomic conditions and anticipated relaxation of world monetary policy. Based on a compound annual growth rate (CAGR) of 25%, asset management company VanEck even more ambitious forecasts see Bitcoin possibly reaching $42.3 million per coin by 2049.

 

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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