The post Has Bitcoin Fallen Into the Hopium Trap? Here’s What You Should Know appeared first on Coinpedia Fintech News
The Bitcoin price has been surging since the start of the quarter and the U.S. election results offered a huge boost to the rally. With this, the price soared effortlessly and marked highs above $108K, marking a fresh ATH. However, what happened next raised some concerns as the price quickly dropped below $100,000 with the Fed Chair comments on the Bitcoin reserve. This suggests the BTC price could be rising with hope but when they are facing reality, it has negatively impacted the price.
Does this signal the rise in the BTC price since November is just a hopium? Will the price face a sell-off after Donald Trump resumes office?
After the win, Trump had shared his plans of setting up a Bitcoin reserve, which created huge bullish waves across the markets, driving the price to new highs. However, the Fed Chairman, Jerome Powell, recently commented against forming a ‘National Bitcoin Reserve’. He said that the agency is not allowed to own Bitcoin and they have no plans for a law change, responding to a question to know his thoughts on the BTC reserve.
In no time, the BTC price dropped really hard, which raises concerns over it’s performance in 2025 after the new president assumes office.
What’s Next—Will BTC Price Face a Crash?
In the past 24 hours, contracts worth over $400 million have been liquidated, of which longs have liquidated for more than $335 million and shorts for nearly $83 million. This points towards the market participants waiting for a substantial downturn during Donald Trump’s inauguration. The prediction of a likelihood of unfullied investor expectations regarding swift policy reforms is much expected, as citied by Arthur Hayes, CEO of Bitmex.
However, these are just speculations, and the real impact is not much distinct with just a month remaining. Besides the rise in spot ETF volumes, MicroStratergy’s growing BTC holdings strengthen hopes of a consistent upswing. As rightly said by a popular analyst, Lark Davis, the Bitcoin price is expected to keep on moving to it’s ATH as Trump is taking office soon. Rate cuts are happening all over the world and the money printer has turned on with cheap capital flowing into the space.
Therefore, the analyst believes the market is at the edge of a mega-altseason, setting the stage for an explosive market rally.