Crypto Market Retreats: Bitcoin Falls as Trump Token Drops More Than 20%

Bitcoin and other cryptocurrencies fell on Tuesday as investor optimism around crypto waned following President Donald Trump’s inauguration. The cryptocurrency market had surged over the weekend after Trump vowed to create a regulatory environment favorable to digital assets and declared his intention to make the United States the global hub for crypto by establishing a strategic Bitcoin reserve. Traders rushed to buy the newly launched “Official Trump,” which had a market value of $15 billion. However, it plummeted by as much as 26% within 24 hours on Tuesday, raising concerns about securities regulation and potential conflicts of interest.

The broader crypto markets also saw mixed fortunes, with gains for Ethereum and XRP outpacing declines for Bitcoin Cash and Litecoin. Despite Trump’s apparent pro-crypto stance, many analysts believe the industry could still face regulatory hurdles in the future. The Trump administration will focus on more significant issues, such as China’s policy and the US economy, which may push digital-asset laws further down the priority list.

Investors may have locked in profits after a strong run, leading to a temporary consolidation phase. IG Australia Pty analyst Tony Sycamore said, “A heck of a lot of good news is now priced in,” he predicted a pullback from current levels. He advised investors to monitor key support levels on the Bitcoin chart, such as those near $92,000 and $87,000. He also warned against betting on a rise above the cryptocurrency’s all-time high of $109,000.

Despite the selloff, many analysts remain bullish on the crypto market. Bitget Research forecasts a short-term correction to $70,000 but says that a clear pro-crypto stance from the Trump administration may reignite momentum.

The Bitcoin price was technically below its 50-day moving average (MA), often used as a momentum gauge. A break below the MA would signal a reversal of the upward trend that has driven the cryptocurrency to new record highs since November.

On the margin, a reversal in sentiment could lead to increased selling pressure on exchanges, with traders looking to exit positions that have seen significant gains as they take profit from the recent rally. The move lower could also prompt more regulators to intervene and clamp down on the crypto markets. Several US lawmakers have expressed concerns over the soaring valuations of some tokens, and the SEC has recently announced plans to review the market. The US Federal Reserve has also indicated that it will monitor cryptocurrencies for signs of a bubble. In the coming weeks, the upcoming legislative and regulatory environment will be a significant factor for bitcoin prices, which could lead to volatile trading conditions.

Related

A Significant Decline in Bitcoin Wallets: What Does It Mean?

Bitcoin has experienced wild fluctuations throughout its history, from...

Buying and Selling Bitcoin through Google Pay

For most people who have the chance to buy...

Understanding The Cryptocurrency Prediction and Trends in 2025

The cryptocurrency world has evolved rapidly over the past...

Dollar Recovers Strongly as Trump 2.0 Shakes Up Markets

The dollar made a strong recovery on Tuesday after...

What Constitutes a Top Crypto Exchange Website?

Cryptocurrency exchanges make it possible for you to buy,...