The Potential Influence of Trump’s Presidential Inauguration on Bitcoin’s Price: Is $100K Attainable?
Bitcoin [BTC] has been maintaining a steady position at close to $98,000 for the past two days.
Following a week of positive trends fueled by the ‘New Year’ excitement, market participants are bracing for potential changes. These changes are linked to the upcoming inauguration of Donald Trump, just a fortnight away.
Alternative cryptocurrencies are also on the move. AIOZ has surged by 20% in the last 24 hours, indicating that funds are not solely focused on Bitcoin but are diversifying across the market.
With anticipation mounting, could this momentum drive BTC past the six-digit milestone? Indications are pointing towards an eventful couple of weeks ahead.
The Countdown Has Begun
In the fourth quarter of the previous year, Trump’s impact assisted Bitcoin in approaching the $100K threshold. However, broader market dynamics swiftly intervened to calm down the surge. This underscores a crucial reality: even potent catalysts are not immune to the unforeseeable effects of larger economic patterns.
During this timeframe, Bitcoin’s exchange reserves spiked by 1.7% within a week, reaching 2.43 million BTC—the most significant rise in over three months.
Nevertheless, the narrative swiftly shifted. Bitcoin reserves have now decreased to a new low in four years, standing at 2.30 million BTC, indicating a reduction in Bitcoin holdings on exchanges.
Despite this, activity levels remain muted. Futures Open Interest (OI) are below $60 billion, in contrast to the $70 billion during Bitcoin’s peak at $108K. Notably, trading volumes have also dwindled by 6%.
With Trump’s inauguration merely two weeks away, a surge in these metrics could provide the necessary push for Bitcoin to breach the six-figure mark – potentially establishing a new record high.
However, poor demand at these levels could alter the scenario, leading to a sharp decline instead. The stakes are high.
Bitcoin Investors Prepare for a Test of Endurance
As Bitcoin edges closer to $100K, the “risk” element is gaining momentum within the market.
Retail investors, constituting 88% of Bitcoin’s network, are sensing the pressure. The apprehension of a possible market crash is looming large, and if Bitcoin fails to solidify $100K as a robust support level, we might witness some reluctance in capital inflows.
Trump’s re-entry into the White House could serve as the ideal stimulant. His influence might be precisely what Bitcoin requires to maintain its resilience and avoid slipping back into the price range of $97K – $99K.
Simultaneously, the alternative cryptocurrency market is closely trailing behind. Ethereum [ETH] is displaying signs of fragility, with a 50% decrease in options volume and the squeezing out of $7 million worth of long positions. The market is anticipating a clear recovery.
The upcoming weeks will challenge your patience. The buzz surrounding Trump’s inauguration could trigger a surge in buying activity, yet without substantial accumulation in both Bitcoin and alternative cryptocurrencies, even Trump’s comeback might not suffice.
Watch the volume indicators closely. A significant uptick in buying could propel the market towards a breakout.