On Tuesday, the price of bitcoin returned above $97,000, as as speculation swirled within the crypto industry about a potential executive order on cryptocurrency during the first day of Donald Trump’s second presidency.
This rebound came after bitcoin’s price plummeted below $90,000 on Monday. Over the past 24 hours, the cryptocurrency climbed more than 6%, ending Tuesday’s trading session in Asia near $96,000. Despite predictions of a possible dip below $70,000, typical of mid-halving corrections, Bitcoin’s resilience caught many by surprise, said Charles Wayn, co-founder of the Web3 infrastructure network Galxe.
“Crypto markets don’t seem to be able to make up their mind how they feel about January right now,” said Wayn. “However, it’s not technicals driving this current volatility – but politics. All markets are paralyzed by the flurry of macroeconomic news hitting us all at once right now, with a stronger-than-expected U.S. jobs report causing a massive nose-dive on Friday.”
On Tuesday, U.S. inflation data showed that the Producer Price Index (PPI) spiked by 0.2% last month, which Wayn said was indicative that the Federal Reserve was unlikely to raise or lower interest rates in the short-term.
However, Trump’s impending second term is a “political wildcard,” Wayn pointed out. “As we know, one of Trump’s winning campaigns was his pro-crypto policy and indeed we see he is hosting a private crypto dinner this Friday ahead of the inauguration,” Wayn said. “On top of that, we have reports that he could implement pro-crypto policies ‘on day one’ of his presidency, which is giving us all a bit more confidence.”
“However, investors and traders remain trigger-happy, and any good or bad news could send things either way,” Wayn said. “While Trump undoubtedly has more important things to do on day one than set crypto policies, he is a showman and knows this will grab the headlines and provide a feel-good boost for nearly 53 million U.S. investors in the middle of some pretty grim macroeconomic news.”
As a result of this, Wayn forecasts that the price of bitcoin might surge to a new all-time high “within the next 10 days,” and will likely avoid plummeting below $70,000.
Bitcoin is currently trading at $96,936, at the time of writing.
“The best thing for anyone involved in crypto to do right now is nothing, to avoid the noise and focus on the projects and communities they care about, while day traders pull their hair out trying to move with sentiment,” Wayn said.
