The upward wave led by speculators on Bitcoin, which started after Donald Trump’s victory in the US elections, has slowed down. This slowdown was evident in the digital currency markets, both spot and derivatives.
In Thursday’s trading, the market witnessed profit-taking operations after the significant rise witnessed by cryptocurrencies. This came in conjunction with the statements of the Chairman of the US Federal Reserve, Jerome Powell. Powell indicated the need to wait before making a decision to cut interest rates.
The price of Bitcoin fell on Friday to below $87,000, moving about $6,500 away from the record high it reached on Wednesday. However, the currency was able to quickly reduce these losses, as it jumped above $88,000 again.
As for Ethereum, the second-largest cryptocurrency, it declined significantly. Its value fell by more than 4% in the last 24 hours, leading to its price falling below $3,100.
While the market was experiencing these fluctuations, there were signs that investors were affected by these statements. The slowdown in economic decisions may increase the caution in the market. However, it seems that the sudden spikes still interest investors, which may stimulate new activity in the market in the coming days.
The crypto markets are expected to remain affected by these economic changes. At the same time, the price volatility may continue amid uncertainty about US monetary policy. If the US Federal Reserve decides to cut interest rates in the near future, we may see relative stability in the market. Cryptocurrencies will remain subject to strong volatility due to economic and political changes.
which puts investors in a position that requires caution.
Investors have pumped about $4.7 billion into Bitcoin exchange-traded funds on US exchanges since Election Day. The total assets of these funds, issued by companies, are estimated at about $94 billion.
Derivatives performance in the crypto market
In the derivatives market, a company revealed a decrease in the premium on Bitcoin futures contracts listed on the Chicago Board of Trade compared to the spot market price. This decline reflects a change in the trends of institutional investors who rely on these contracts to build investment positions in the digital currency.
According to data, a significant increase in open options contracts betting on a decline in Bitcoin was observed, with expectations centered on a price of $80,000. This data indicates that some investors expect a price correction or a sharp decline in the near future.
For his part, a market official stated that signs of stability have begun to appear. He added that the narrowing gap between futures contracts and the spot market price may be an indication of a decrease in risks in the market. These signs may indicate a decline in the severe fluctuations that the digital currency markets have witnessed in the recent period.
Some analysts also believe that the markets have become more mature in their dealings with futures contracts. They point out that the stability of the gap between futures contracts and the spot price may help boost confidence among institutional investors. These trends are expected to contribute to pushing the market towards a phase of relative stability in the short term.
In addition, there is increasing interest in how these fluctuations in derivatives markets will affect Bitcoin trading in the future. While some expect this volatility to be just a temporary phase before the resumption of greater investment activity. Derivatives markets remain vulnerable to sudden changes, but for now, indicators point toward stability.
In general, political movements have a significant impact on cryptocurrency markets, and Trump’s future decisions could help shape the legal and commercial environment for cryptocurrencies in the United States.
Political movements and Trump’s impact on the Bitcoin market
Bitcoin has surged by about 30% since the US election on November 5, largely due to President-elect Donald Trump’s pro-crypto stance. With his election victory, Bitcoin has become part of what is known as the “Trump trade,” with investors closely watching to see if these gains will continue.
Trump has promised to provide a regulatory framework that encourages cryptocurrencies, in addition to creating a strategic reserve of Bitcoin. He has also spoken of transforming the United States into a global hub for this growing industry. This shift in his position raises questions about the impact of his policies on the future of digital currencies. Initially, Trump was skeptical of the viability of digital assets, but over time and as support from crypto companies increased during his election campaign, his opinion has changed significantly.
Despite these optimistic promises, the question remains about whether these promises can be implemented in the near term. Some analysts believe that transforming the United States into a global hub for cryptocurrencies will require massive efforts and complex regulatory reforms. There are significant challenges to achieving this goal, especially in light of the reservations expressed by some in Congress.
Moreover, Trump is facing pressure from traditional financial institutions that may not be happy with the statements supporting digital currencies. In this context, expectations about the Bitcoin market and its future under the new policies seem mixed. While some believe that political encouragement may push the market towards further increases.
others expect the market to witness some fluctuations due to regulatory challenges.
In the long run, the regulatory future of cryptocurrencies may be shaped based on the steps that Trump and his team will take. If the new administration succeeds in providing clear regulatory solutions, this may reflect positively on Bitcoin prices and enhance investor confidence.
Market Outlook: A State of Volatility and Uncertainty
The market is currently heavily dependent on speculation. He explained that the coming period is expected to witness significant fluctuations, in light of the lack of clarity about future fiscal and monetary policies in the United States. Davis noted that markets will be on the lookout until these new policies are announced. He said that $90,000 is a crucial level to monitor the market’s direction in the coming period. This level may act as a “resistance point,” or perhaps a springboard to higher levels. According to the data, there is a strong interest in betting contracts that expect Bitcoin to reach $100,000. This interest reflects the growing optimism in the market, despite the extreme volatility witnessed by digital currencies.
Altcoins: Decline in risk appetite
Apart from Bitcoin, other cryptocurrencies such as Ethereum and Dogecoin saw a significant decline in their value on Friday. This decline came amid traders reducing their bets on Federal interest rate cuts, following statements made by Jerome Powell, the Chairman of the US Federal Reserve. Powell had stressed in his statements the need to be cautious when dealing with monetary policy in the coming period.
This change in trends has led to a decrease in investors’ appetite for risk.
which has negatively affected the performance of altcoins. Analysts explained that most of these currencies are suffering from severe pressures in an unstable economic environment.
as investors tend to reduce their exposure to high-risk assets. Therefore, the value of Ethereum and Dogecoin has declined significantly, especially with increasing concerns about the economic future.
