The risks of shorting cryptocurrencies are increasing as Trump thwarts the bulls without any policy

• Cryptocurrency momentum has slowed amid a lack of pro-crypto political announcements from President Trump.
• According to Standard Chartered, the lack of new updates could lead to a market correction of 10% to 20%.
• Investors should buy the dip, relying on altcoins that will benefit from new ETFs and specific regulatory changes.

The time it takes President Donald Trump to unveil Encryption policyThe more risk investors face with a painful sell-off.

Ahead of Inauguration Day, cryptocurrencies rose on hopes that the new president would make supportive changes within days. As Trump entered the White House on Monday, Bitcoin It jumped to a record high of $109,000, as investors cheered and eagerly awaited new pro-crypto policy decisions.

But the noise did not last. Bitcoin and other cryptocurrencies have been trending lower since January 20. The token fell another 2% on Wednesday to trade at around $104,172

According to Standard Chartered, declining momentum and the potential for a deeper correction reflect growing disillusionment with the lack of new policy announcements. The pain will also worsen if the administration does not provide a new incentive that can achieve new gains soon.

“Hope is not a strategy. It can last for days, not weeks,” Jeff Kendrick, global head of digital asset research, said on Wednesday. “When hope dies, digital asset prices will fall by 10-20%.”

Investors had a lot to look forward to when Trump was sworn in on Monday. There was hope of an executive order Encryption is a national priorityAnd excitement for the Bitcoin Strategic Reserve.

In the absence of any update, the odds of establishing a strategic reserve within the first 100 days of Trump’s term have declined from… 48% on Monday to 31% on Wednesday On the Polymarket betting site.

Meanwhile, some in the cryptocurrency industry have expressed frustration with the president’s recently issued Trump coin, with some viewing it as a scam. A threat to the credibility of the industry. Coins are very volatile and are traded based on emotions only.

Kendrick expects the administration will eventually deliver on its crypto promises, but if it doesn’t happen soon, the next correction could last weeks or months. More headwinds could come if Trump continues to impose tougher tariffs on US trading partners. He wrote that protectionist trade policy could boost inflation in the US, hurting digital assets.

The risk remains that Bitcoin will fall below $90,000, which is the main limit reached by Kendrick. Previously warned Investors to watch. However, with Bitcoin up nearly 14% from that price on Wednesday, a drop to that level would require significant liquidation of long positions.

No matter how much the digital asset falls, Kendrick eventually sees the correction as an opportunity to buy the dip. Although he believes that Bitcoin is still likely to arrive $200,000 by the end of the yearInvestors may also want to pay attention to other tokens in 2025.

After Trump’s election, Standard Chartered Bank predicted that the total market value of cryptocurrencies would expand fourfold by 2026, while Bitcoin’s market share would decline from about 60% to nearly 40%.

Both trends appear to be taking shape, which could make 2025 a particularly strong year year for altcoins. While institutional cryptocurrencies will continue to dominate, Kendrick suggested that investors should rely on tokens that benefit from new ETF approvals, such as Litecoin, or those that arise from specific regulatory changes, such as Uniswap.

Despite the bank’s thesis, some in the cryptocurrency space feel that little the administration has done in the crypto space actually helps. The Securities and Exchange Commission announced Tuesday New Cryptography Task ForceWhich insiders see as a gateway to updated regulations and more approvals for cryptocurrency funds.

“The newly created Cryptocurrency Task Force, led by Commissioner Hester Peirce, can accelerate approval of a wide range of cryptocurrency ETFs, including SOL, XRP, LTC, DOT, and DOGE,” wrote Matt Mina, crypto research strategist at 21Shares.

According to Joel Krueger, market strategist at LMAX Group, investors should take this as a sign that the president is following through on campaign promises.

“Technically, Bitcoin is doing a good job of consolidating after another push to a new high this week. According to our chart analysis, the stage is now set for the next major bullish extension towards $130,000,” he wrote on Wednesday.