🌎 Crypto Market Plummets Despite US Presidency

Bitcoin and Altcoins Plummet Despite Crypto-Friendly US Presidency

Despite the inauguration of Donald Trump, who is expected to be the most crypto-friendly president in the US, Bitcoin and most altcoins have experienced a decline in value this week. The Bitcoin price dropped to $101,000 on January 23rd, while popular meme coins such as ai16z, Fartcoin, and Official Trump fell by over 20%. Other top laggards included coins like Lido DAO, Jupiter, Virtuals Protocol, and Hyperliquid.

Possible Reasons for the Crypto Retreat

There are four possible reasons for the ongoing crypto retreat. Firstly, economists expect the Bank of Japan to hike interest rates by 0.25% on Friday, bringing the official cash rate to 0.50%, the highest level since 2008. This rate hike may trigger another drop in cryptocurrencies and other assets, similar to what occurred in August last year.

Secondly, Bitcoin and altcoins fell as traders waited for next week’s Federal Reserve interest rate decision. A hawkish tone may also lead to more weakness in the crypto industry since it would push government bond yields higher.

Thirdly, the lack of mention of crypto by Donald Trump since his inauguration, as well as the absence of any executive order on cryptocurrency, has contributed to the decline. This explains why the odds of him creating a strategic Bitcoin reserve have dropped to 40%.

Lastly, the popular practice of buying an asset ahead of a major event and then selling it when it occurs has also led to the decline in altcoin prices.

Risks of a Bitcoin Price Double Top

Bitcoin has formed the risky double-top chart pattern at $108,100. This pattern is made up of two peaks and a neckline and is usually a bearish reversal sign. The neckline in this case is at $89,305. By measuring the distance between the double-top and the neckline, the potential target for the coin is about $74,000.

Therefore, Bitcoin will remain on edge as long as it is below that double-top pattern. This will, in turn, affect other altcoins that often move in the same direction as Bitcoin.

Key Takeaways

Here are some key takeaways from the current market situation:

The Bitcoin price may drop to $74,000 if it fails to move above the double-top pattern.
A hawkish tone from the Federal Reserve may lead to more weakness in the crypto industry.
The lack of mention of crypto by Donald Trump since his inauguration has contributed to the decline in altcoin prices.

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