Bitcoin Tumbles Post-Trump Inauguration, Following a Familiar Market Cycle
Is Bitcoin once again caught in a sell-the-news event following a major U.S. development?
Since President Trump’s inauguration on January 20, Bitcoin (BTC) has plunged from its all-time high of $109,000 to $80,000, extending its correction after last Friday’s digital assets summit. This downturn follows a recurring pattern in which significant bullish catalysts lead to short-term peaks before corrections set in.
Despite the immediate bearish sentiment, long-term investors see potential upside. The transition to a more crypto-friendly U.S. administration could pave the way for regulatory clarity and increased institutional participation. However, Bitcoin’s lack of strong buying support at current levels suggests further downside risk in the short term.
This market behavior echoes what happened during the launch of U.S. spot Bitcoin ETFs in early 2024. Leading up to the event, Bitcoin rallied from $25,000 in October 2023 to $49,000 in January 2024—gaining more than 40%. Yet, the ETF launch became a local top, triggering a 20% pullback before Bitcoin eventually surged to a new high above $73,000 by March.
A similar pattern is playing out now. After Trump won the presidency in November, Bitcoin soared 60% to a record-breaking $109,000, only to experience a sharp 30% correction. This repetition suggests that while major bullish events drive initial surges, they often lead to short-term market resets before the next leg higher.
The big question is whether Bitcoin can recover from this correction and resume its upward momentum. The answer will depend on macroeconomic factors, market liquidity, and investor sentiment in the weeks ahead.
