Bitcoin Price Forecasted to Drop as Trump’s Market Optimism Fades
The cryptocurrency market is experiencing a downturn as optimism surrounding President Trump’s initiatives fades. Market experts project Bitcoin prices may fall to $70,000, influenced by trade tariffs and inflation concerns. Recent sell-offs have significantly impacted investor sentiment, leading to a cautious market environment despite some positive developments.
The cryptocurrency market appears to be experiencing a downturn, as the anticipated ‘Trump-effect’ diminishes. A recent summit led by President Donald Trump, along with his executive order for a ‘Strategic Bitcoin Reserve,’ failed to stimulate investor enthusiasm, resulting in significant sell-offs in Bitcoin and other digital currencies. Market experts are projecting that Bitcoin could decline to $70,000 in the near future due to these developments.
On Tuesday morning, Bitcoin traded at $79,448, reflecting a decrease of over three percent from the previous day. Just ahead of Trump’s inauguration in January, Bitcoin had reached an unprecedented price of over $109,000. However, optimism has faded as ongoing issues, including the trade tariff war and rising inflation concerns, have shifted investor sentiment away from cryptocurrencies.
Recent analysis indicates that the Crypto Fear & Greed Index has fallen back into the ‘extreme fear’ category, following a temporary recovery prior to the crypto summit. “The crypto market continues to exhibit risk-on behaviour, with investor sentiment remaining cautious despite key developments,” remarked Agne Linge, Head of Growth at WeFi, emphasizing the persistent volatility since early March.
Market analysts project that volatility will likely persist, especially with significant US inflation reports forthcoming. Continued inflation could influence Federal Reserve policies and further impact Bitcoin’s market performance. Sector experts have indicated that the Bitcoin Volmex 30-Day Implied Volatility Index points to further price fluctuations as investors remain apprehensive.
Since its peak, the broader crypto market has decreased by over $1 trillion in market capitalization, with approximately $4.4 billion withdrawn from US Bitcoin ETFs since February. Trump’s recent executive decisions concerning a Bitcoin reserve have not boosted market sentiment, primarily due to the lack of new capital commitments and an underwhelming reaction to the crypto summit.
Experts believe that the current geopolitical tensions and inflationary pressures from ongoing tariffs continue to negatively influence investor confidence. “The escalation of tariffs is expected to drive inflationary pressures, raising the possibility of broader macroeconomic fallout in the coming weeks,” stated Linge, reflecting concerns over the market’s future.
The announcement of the strategic Bitcoin reserve failed to impress investors, as it is viewed as not significantly contributing to market value. Observers have noted that the selection process of assets for the reserve appears politically influenced, raising further skepticism about the administration’s intentions. “It’s created the impression that the Trump administration is engaged in the lobbying-based selection and promotion of ‘insider’ assets,” commented Ari Paul, co-founder of BlockTower Capital, indicating that the cryptocurrency market is perceived as a short-term trading platform.
In conclusion, the cryptocurrency market faces significant challenges as investor confidence wanes following President Trump’s recent initiatives. With projections suggesting a drop in Bitcoin prices to $70,000 due to geopolitical tensions and inflation concerns, market sentiment has shifted toward caution. Despite some positive developments, the overarching influence of macroeconomic factors indicates a turbulent period ahead for the crypto market.
Original Source: www.arabianbusiness.com
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