Trump’s impact on the crypto space seems to be fading as the markets continue to slide despite an executive order being signed for a Bitcoin strategic reserve. The price plunged hard and hit the bottom at $76,000. While the bears continue to offer strong upward pressure, bulls seem to be struggling to elevate the levels back above $80,000. This suggests that the retail traders have temporarily exited the market while the institutions and the whales are trying hard to keep the levels inflated.
Since the start of the year, multiple events have occurred that favored the crypto space. Trump’s inauguration, his plans to make America the Bitcoin capital of the world, SEC dropping lawsuits & investigations, Trump’s buying more and more cryptos, and importantly, the creation of a Bitcoin Statergic Reserve. Despite all these, the BTC price failed to reclaim $100K and dropped more than 20% from the consolidated zone around $96,600.
What’s Causing the Downfall?
Historically, the stock markets and the crypto markets have been inversely correlated. The stock market crash has always benefited cryptos. Now, when the Nasdaq witnessed its worst drop since 2022, wiping out over $1.7 trillion from the market, Bitcoin & cryptos are dumping too. This suggests the institutions now hold a major stake over the markets, which may not be good for healthy crypto markets. The drop in the spot and the future market volume substantiate the claim.
Will the BTC price Continue to Drop? Has the Bear Market Officially Begun?
On the other hand, other cryptos like XRP, Cardano, & Solana are demonstrating strength while Ethereum closely follows Bitcoin’s footsteps. This suggests that the other popular altcoins remain stable, hinting towards a correction rather than the start of a bear market. Meanwhile, the traders have become bearish on Bitcoin as cumulative shorts continue to accumulate, but this may not impact the other tokens or the entire markets.
On the other hand, Mt.Gox has yet again moved BTC worth over $900 million to various platforms, which is expected to add to the selling pressure. However, President Trump is set to sign executive orders overturning Biden’s crypto banking restrictions. In the times when accumulation remains relatively low, it could be interesting to watch in which direction the markets may flow in the coming days as uncertainty is rising to its peak.
