Bitcoin Price Decline: Trump’s Election Effect No Longer Supports Market

Bitcoin Price Struggles as Trump Boost Fades: What’s Next?

Bitcoin Price– The positive market sentiment following Donald Trump’s victory in the November 5 Presidential election has quickly dissipated, as seen in an indicator tied to CME Bitcoin (BTC) futures. The indicator shows a significant narrowing of the spread between “continuous” next-month and front-month BTC futures contracts. This spread has fallen to $495, a stark decline from its peak of $1,705 on December 17, signaling a weakening of the bullish momentum that followed Trump’s election.

The reversal of the Trump bump suggests that the market has moved past the narrative that a pro-crypto president would significantly benefit the industry. As a result, macroeconomic factors have regained their influence on the market. According to market expert Erdosi, “The front contract basis has repriced lower substantially since the beginning of March, signaling moderating near-term expectations that the primary catalyst for the recent rally—the election of President Trump—has been fully priced in.”

Market Decline Amid Broader Economic Concerns

Both Bitcoin and the tech-heavy Nasdaq have dropped significantly since early February. Bitcoin has lost 20%, while the Nasdaq has dropped 8%. Factors contributing to these declines include geopolitical uncertainty, Trump’s tariffs, and concerns about inflation and economic growth. Moreover, disappointment looms over Trump’s digital asset reserve plan, which failed to bring new purchases, further dampening market optimism. Last week, Trump signed an executive order to create a strategic reserve that includes BTC seized during enforcement actions, but this has not sparked significant new buying interest.

As the market faces a slowdown, traders and investors should closely monitor macroeconomic trends and market sentiment to navigate the current volatility.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.