Bitcoin could face short-term corrections leading up to and following President-elect Trump’s Jan. 20 inauguration in the United States.
The price of Bitcoin fell to around $94,000 on Jan. 11 — down by over 8.5% over the past five days from a local peak of over $102,000 recorded on Jan. 7.
BTC is currently trading below its 20-day exponential moving average (EMA) — a sign that bears are presently in control. Price has also been consolidating since Dec. 19, 2024.
The Relative Strength Index (RSI) is trending down and is currently at 45, which is neither oversold nor overbought, but has decreased by over 20% since Jan 6.
Industry analysts have warned that Bitcoin and the crypto markets could suffer a correction around President-elect Trump’s inauguration on Jan. 20, as traders see it as a sell-the-news event, or promises of pro-crypto legislation are not met.
Inauguration Of President-Elect Trump May Induce Sell-Off
Arthur Hayes, co-founder and analyst of BitMEX, issued a warning to crypto speculators in a Dec. 17 article that the inauguration of Donald Trump as President of the United States could result in a market-wide sell-off.
Hayes stated that investors would promptly liquidate their crypto and equity positions that were acquired with the anticipation of pro-crypto and pro-business policies from the second Trump administration.
The analyst anticipated that a significant sell-off would occur when investors recognized that policies require a significant amount of time to be implemented and that Trump must pass favorable legislation within one year.
Nevertheless, Hayes maintained his optimism regarding the long-term value of Bitcoin, citing macroeconomic factors such as the global debasement of currencies and the ballooning of government debt.
The US Federal Reserve’s injection of up to $612 billion in new liquidity could also compensate for a potential regulatory disappointment from the Trump administration, thereby driving the price of BTC higher during Q1 2025.
In a December 2024 social media post, CryptoQuant CEO Ki Young Ju reiterated Hayes’ caution.
According to Ju, the economic status of the United States and the value of the US dollar will determine the success of Trump’s pro-crypto policies.
The CEO stated that the US dollar is presently experiencing a surge in value as a haven asset, which is utilized as a global store of value.
Ju further stated that it is improbable that Trump will establish a Bitcoin strategic reserve due to his rhetoric of bolstering the US dollar and the US in foreign trade.
