Key Takeaways
- Bitcoin dropped 18% from its $108K December peak to $89K.
- K33 analysts no longer see Trump's inauguration as a sell signal.
- Market focus has shifted to tariffs, tax cuts, and Bitcoin policies.
Donald Trump’s November election victory initially sparked optimism in Bitcoin markets, with prices surging to all-time highs of over $108,000 on December 17.
However, macroeconomic pressures, including rising bond yields, a stronger dollar, and tempered Federal Reserve rate cut expectations, have since cooled the rally.
Price decline
Bitcoin has fallen nearly 18% from its December peak, hitting a low of $89,000 on January 13.
Currently trading at $96,793, the cryptocurrency shows signs of stabilization but remains well below its recent highs.
Analyst outlook
Analysts at K33 had previously suggested that the January 20 inauguration would be a “sell-the-news” moment, as lofty expectations of pro-Bitcoin policies from Trump’s administration confronted the slower realities of Washington politics.
However, K33 now sees this strategy as less appealing due to the market’s shift toward conservatism and caution.
Market sentiment
Analysts Vetle Lunde and David Zimmerman noted in a report:
The market jumped the gun with Trump enthusiasm in November until mid-December, but conservatism has since prevailed.
They highlighted ongoing debates about Trump’s proposed tariffs, potential tax cuts, and anticipated Bitcoin-friendly policies as key factors influencing risk assets.
Historical comparison
Comparing Trump’s first and second terms, K33 noted similar early enthusiasm in the S&P 500 post-election.
However, the recent divergence suggests broader market caution ahead of the inauguration.
