Bitcoin: Indicators Turn Red! Is The Drop Inevitable?

Bitcoin (BTC) recently fell below its 20-day exponential moving average (EMA) after reaching a peak of $94,000 a few days ago. This decline signals a strong correction period as investors prepare for Donald Trump’s inauguration.

Is Bitcoin programmed to fall?

Bitcoin experienced a significant drop, falling to around $94,000 on January 11, 2025, a decline of over 8.5% from a local peak of over $102,000 recorded on January 7. Currently, BTC is trading below its 20-day exponential moving average (EMA), indicating that bearish factors are controlling the market.

The price of BTC is currently in a consolidation phase. The relative strength index (RSI) is declining and stands at 45, which is neither oversold nor overbought but has dropped by over 20% since January 6. As a result, Bitcoin and the crypto market may undergo a correction around Donald Trump’s inauguration on January 20, with traders viewing this as a news-driven sell-off.

Is the future of the crypto market in Trump’s hands?

Arthur Hayes from BitMEX predicted that once investors realize that pro-crypto policies will take time to be implemented by Trump, this will trigger massive BTC sell-offs, followed by a general drop in digital assets. According to Ki Young Ju, these pro-crypto policies from Trump will depend on the economic situation in the United States and the value of the US dollar, which is currently gaining strength as a safe-haven asset worldwide.

However, analysts are optimistic about the long-term price of Bitcoin due to several macroeconomic factors. Notably, the increase in public debt, the devaluation of currencies worldwide, and the massive liquidity injection by the FED.

Although indicators predict a violent period of correction for Bitcoin, long-term prospects remain positive due to global economic factors. Investors should thus remain vigilant and well-informed to navigate these turbulent waters.