Bitcoin's price has dropped to $94,000, raising investors' concerns. Analysts offer varied opinions on the current situation and its link to Donald Trump's inauguration.
Current State of Bitcoin
Currently, Bitcoin is trading below its 20-day exponential moving average (EMA), indicating bearish market control. The price has been consolidating since Dec. 19, 2024. The Relative Strength Index (RSI) is trending downward at 45, neither oversold nor overbought, but down by over 20% since Jan. 6.
Analysts' Opinions on Potential Market Correction
Analysts warn that Bitcoin and crypto markets could face a correction around Donald Trump's inauguration on Jan. 20. BitMEX co-founder and analyst Arthur Hayes cautioned that the event could trigger a market-wide sell-off. He noted that investors would quickly sell off crypto and equity positions purchased with expectations of pro-crypto policies under Trump's second administration. However, long-term macroeconomic factors, such as growing government debt and currency debasement, will support Bitcoin's price trajectory.
Long-term Bitcoin Prospects
Despite potential short-term hurdles, long-term macroeconomic conditions are expected to drive Bitcoin's price higher, according to Hayes. Meanwhile, CryptoQuant CEO Ki Young Ju stated that Trump's crypto policies will depend on the U.S. economic status and the dollar's value.
Despite current uncertainties and potential short-term risks, Bitcoin's long-term prospects remain positive. Future developments heavily depend on the new administration's economic policy and broader macroeconomic conditions.
