Trump Tensions Pushes Bitcoin Below $93,000 – Here Experts See a Price Rebound – DL News

It’s Trump’s economic policy.

This is basically the answer you get when you check the reasons behind Bitcoin falling below $93,000 in the last 24 hours.

More precisely, analysts point to the minutes of the December Federal Open Markets Committee meeting, released on Wednesday, as a major catalyst behind the cryptocurrency market’s decline.

The Fed minutes “confirm that the Trump administration and its policy fallout were the main driver of the Fed’s hawkish shift,” Peter Chung and Min Jung, analysts at Bristow Labs, wrote in a report Thursday. Research note.

It goes against the traditional narrative that a second Donald Trump presidency will lead to an unprecedented rise in cryptocurrencies. Trump has promised to reduce red tape that the cryptocurrency industry has said is holding him back.

The new Trump era has been seen catapulting Bitcoin to the top $200,000 Analysts said the move would come in 2025, and would drag the rest of the cryptocurrency market with it.

While Bitcoin’s 14% drop from its record high of $108,135 may raise doubts, analysts say the rally is still on track, but investors should be patient.

“The breakout will occur when the market completes the recalibration process and uncertainty disappears,” Presto Labs analysts wrote.

When is that? This is not clear.

Signs of this are likely to appear after Trump’s inauguration on January 20, and will gradually take shape during his first 100 days in office. “Be patient and watch,” Chung and Jung wrote.

What’s behind Bitcoin’s decline?

Cryptocurrency markets pumped hard on the back of Trump’s election victory. Both Bitcoin and Solana Achieved new records and cryptocurrencies such as XRP Hitting levels not seen in years.

Then the rally lost momentum. The value of the cryptocurrency market has fallen 10% since its December high to just under $3.5 trillion, according to Queen Gekko.

A similar decline can be seen in the S&P 500, which fell 2% over the same period. Stocks are relatively risky assets and tend to respond to the same macroeconomic factors as cryptocurrencies, such as Federal Reserve policy.

“The recent recession was expected,” said Carlos Guzman, an analyst at GSR. DL News.

He argued that several major positive market catalysts – such as Trump Nominate cryptocurrency supporters To key government positions – “It has now passed.”

But Guzman said the downturn is just a pause.

“We maintain a positive market outlook for 2025 largely due to expectations of improved regulatory clarity in the US and pro-crypto policy, but these catalysts will take longer to kick in,” he said.

What’s next?

In the short term, Guzman believes that there are several factors driving this rise.

This includes more pro-crypto nominations from Trump, new nominations to key regulatory positions, and the FTX bankruptcy payout starting in February, which could see between $2 billion and $8 billion returned to cryptocurrency markets.

A wobbly Chinese economy could also fuel Bitcoin’s rise, said David Brickell, head of international distribution at FRNT Financial. DL News Earlier this week.

As the value of the yuan declines, capital outflows out of China will accelerate.

“Bitcoin will be an obvious destination for some of these flows, especially with capital controls making it difficult to get capital out of China through traditional channels,” Brickell said.

Seasonal cycles are likely to push Bitcoin to a new peak at the end of this quarter, according to BitMEX founder Arthur Hayes. He said this week.

Maelstrom investment fund’s chief investment officer encouraged investors to look at last year’s price pattern and “sell in the late stages of the first quarter” and wait until “positive cash flow conditions” return in the third quarter.

Crypto market drivers

• Bitcoin fell 1.6% over the past 24 hours to trade at $93,353.
• Ethereum price fell 2% to trade at $3,294.

What we read

Erik Johansson is news editor at DL News. Got a tip? Email at eric@dlnews.com.