What’s the Next Event That Could Send Bitcoin Price Skyrocketing After the Trump Rally? “Sky Could Be the Limit,” Says Analyst
Bitcoin’s post-election rally fueled by Donald Trump’s victory has stalled. After gaining 36% in the week following the US election, BTC momentum has slowed as attention shifts to Fed policies and broader economic signals.
Citing a mix of monetary policy uncertainty and investor caution, analysts suggest Bitcoin may have to wait until 2024 for its next significant price increase.
Fed Chairman Jerome Powell recently signaled concerns that inflation will continue, despite significant progress being made in reducing inflation that has reached record levels. At the last Fed meeting, Powell said the central bank would continue to cut interest rates, but at a slower pace, adding, “The job is not done.”
“Good news turned into bad news as the Fed announced it was too early to tell whether it would cut interest rates at its December meeting,” said Greg Magadini, director of derivatives at Amberdata.
Despite the current pause, market experts remain optimistic about Bitcoin’s long-term prospects. Swan Bitcoin CEO Cory Klippsten suggested that Bitcoin is in the early stages of a “major bull run.” However, he warned that pullbacks of 20% to 40% could occur along the way, making market timing a risky endeavor.
Carlos Guzman, an analyst at market-making firm GSR, weighed in on the broader optimism in the crypto space. “We are moving from an actively hostile administration to the most crypto-friendly administration the United States has ever seen,” he said, referring to Trump’s pro-crypto campaign stance.
Trump’s recent appointments, including the surprise nomination of Matt Gaetz to head the Justice Department, have added to the unpredictability factor, while the President-elect’s pick for Treasury Secretary is also on the minds of crypto investors.
Kevin Warsh, a former Fed official, is seen as the leading candidate, while odds have fallen for crypto-friendly candidates such as Cantor Fitzgerald CEO Howard Lutnick and Key Square Group founder Scott Bessent.
One of Trump’s most ambitious campaign promises, a national bitcoin reserve, remains a wild card. Guzman noted that while it’s still unlikely, it’s not entirely out of the question, especially with the strong support of pro-crypto Senator Cynthia Lummis.
“If it becomes law, the sky could be the limit for Bitcoin prices and altcoins could follow suit,” Guzman said.
*This is not investment advice.
