As Donald Trump embarks on his second term, the initial expectations for Bitcoin’s performance have evolved intriguingly. Post-inauguration in January, while Bitcoin reached new heights, it has simultaneously found itself in a phase of consolidation, surrounded by a broader bearish sentiment. Analysts from XWIN Research Japan recently conducted a comparative analysis of the current crypto landscape against the post-election mood of 2016, highlighting the lack of enthusiasm around Bitcoin’s price trajectory this time around.
In a detailed examination captured in a Quicktake post, the analysts articulated the reasons behind the stark differences between 2016 and now. Following Trump’s 2016 victory, the cryptocurrency environment was marked by low inflation and minimal interest rates—conditions that fueled liquidity and capital flow into the nascent market. The small size of the crypto market allowed for swift capital accumulation, creating a robust uptrend fueled by speculative investments.
In stark contrast, as we approach early 2025, the landscape has transformed significantly. Currently plagued by higher interest rates and tighter financial conditions, the context for Bitcoin and broader crypto investments has become increasingly constraining. The market growth since 2016 has seen Bitcoin evolve into a larger financial asset, diminishing the isolated influence of political developments on price fluctuations. Now, geopolitical outcomes alone, particularly from the presidential lens, are unlikely to drive Bitcoin’s price in any significant direction amidst prevailing liquidity constraints.
XWIN Research Japan’s findings also delve into the Bitcoin SOPR Ratio (Long-Term Holder – Short-Term Holder), which reflects market sentiment and the dynamics of profit-taking among Bitcoin holders. The analysis indicates that long-term holders are realizing limited profits, while short-term holders are operating in unfavorable territory. Historically, such conditions signal that the market is gearing up for a prolonged rebalancing between demand and supply.
The conclusion drawn suggests that Bitcoin is currently under a fundamentally bearish structure. While analysts maintain that as long as long-term holders continue to dominate and absorb short-term selling pressure, BTC might experience some support, they caution against unrealistic expectations for significant upside movements. The fate of Bitcoin rests heavily on stable ETF inflows and a notable reduction in long-term holder distributions—without these factors aligning, a continued state of inertia or further declines could be on the horizon.
At present, Bitcoin is valued at around $87,623, reflecting a slight loss of 0.5% over the past week, but showing a modest uptick of 0.6% in the last 24 hours, as reported by CoinMarketCap. The current market sentiment underscores a complex intersection of hope, caution, and the political backdrop of the new Trump presidency, leaving many investors pondering the next steps in the evolving crypto narrative.
