New risks for the price of Bitcoin after the end of the Trump trade

The so-called Trump trade is now over, but its end brings with it further risks for the price of Bitcoin. 

There are indeed some indicators suggesting that further declines could occur, particularly both below $90,000 and perhaps even below $80,000. 

The Trump trade and the price of Bitcoin

By “Trump trade,” it obviously refers to the positive and disruptive effect on the financial markets from Donald Trump’s electoral victory in November. 

Taking as a reference the price of Bitcoin, before that victory it had never been above $75,000 in its entire history.

Instead, already that day it rose above $76,000, then rose for the first time above $80,000 only four days later, and above $90,000 another three days after. 

In the following weeks, it then managed to rise for the first time in history above the fateful $100,000, with a historic high above $108,000 shortly after mid-December. 

Since then, however, it has not risen further. 

The end of the Trump trade on the price of Bitcoin and altcoin

The Trump trade ended exactly on Wednesday, December 18, when the Fed announced a change in perspective on the rate cut in 2025. 

That change in perspective, which greatly reduced the number of cuts expected for the current year, forced the markets to reposition themselves on more conservative positions, and made the enthusiasm of the previous weeks disappear. 

To tell the truth, however, Bitcoin subsequently did nothing but move sideways in a very high price range between $90,000 and $100,000, but things could change now. 

In particular, yesterday Donald Trump held a long press conference during which he said many things that did not please the markets.

Is the honeymoon with the markets over?

Now the question that needs to be asked is: does what happened yesterday mark the end of the honeymoon between the financial markets and Donald Trump?

For now, it actually doesn’t seem possible to answer this question positively, also because, for example, the price of Bitcoin has returned to the same levels as before, but there are some forecasts that suggest it might indeed be over, at least for now. 

The point is that there are increasingly more forecasts that see a return well above $100,000 of the Bitcoin price in the medium-short term as highly unlikely, and there are several that instead hypothesize a drop below $90,000. It should be noted that since the end of the Trump trade, it has never fallen below that threshold. 

During an initial hypothetical phase of this decline, the landing point according to some analysts could be $88,000. 

The price of Bitcoin in the medium term

Despite there being several analysts who argue that there could even be a second bear phase, which could bring the price of Bitcoin even below $80,000, there are instead less pessimistic prospects in the medium term.

It is therefore necessary to distinguish what will happen in the coming days, what in the coming weeks, and what in the coming months. 

In the coming days, there might be the first phase of decline, as suggested by the Dollar Index still so high that it indicates markets are just waiting for a drop to buy again. Moreover, this very signal certifies that it is not a specific problem of the crypto markets, but a broader issue concerning all financial markets.

This phase could also be followed by a subsequent phase of decline that might persist in the coming weeks, even though there seems to be less consensus among analysts on this forecast. 

Instead, the sentiment for the coming months does not seem to be particularly negative. After all, if it is true that many investors have sold risk-on assets in recent times to buy dollars, they have done so to be able to use those dollars to buy back at lower prices, that is, with the prospect that from that point onwards they may rise again. 

The altcoin

A separate discussion is the one that concerns altcoins. 

In fact, at this moment the crypto market seems completely dominated by Bitcoin. 

That is, if taken as a whole, at this moment altcoins seem to limit themselves to following Bitcoin, even if sometimes some manage to move independently (but only for a short time). 

It seems highly unlikely that a further drop in the price of Bitcoin could instead be followed by a rebound of altcoins as a whole, even though some individual crypto might register something good (but these are exceptions). 

Indeed, in difficult phases, the crypto markets turn mainly to Bitcoin, with altcoins tending to underperform BTC. Therefore, perhaps in this phase, altcoins might even end up falling more than BTC, although in the event of future rebounds, they might return to record superior performances. 

On the other hand, it seems that there is a mountain of dollars ready to flow into risk-on assets as soon as the decline is presumably over, so 2025 still has the potential to be a positive year, at least in theory.