Author: Techub exclusive interpretation
Written by: Tia, Techub News
On Thursday evening last week, Hong Kong time, the cryptocurrency market experienced dramatic fluctuations within a few hours. Mainstream currencies such as Bitcoin and Ethereum experienced sharp rises and falls within a few hours, while the trends of altcoins were clearly differentiated. Some prices doubled in a short period of time and then fell slightly, while others "followed the decline but not the rise", setting a new stage low.
The reason is that the United States has made good news about the improvement of its cryptocurrency policy, but the reason for such drastic fluctuations is that different people understand these news differently...
"The big one is coming! I'm going to be the team leader!"
The dynamics of US Senator Cynthia Lummis were undoubtedly one of the core driving forces of last night’s market. As the proposer of the Bitcoin national strategic reserve proposal, Lummis released an intriguing hint 15 minutes before the opening of the US stock market: “Big things are coming.”
Many investors speculated that the proposal for the strategic reserve of Bitcoin might be passed soon. After the U.S. stock market opened, Bitcoin rose by more than 2.5% in 15 minutes. But then, the so-called "big" thing was just Lummis's confirmation as the chairman of the U.S. Senate Banking and Digital Assets Subcommittee. The huge psychological gap caused Bitcoin to fall by more than 3% in 15 minutes, staging a "roller coaster" market.
But the decline of Bitcoin did not last. Perhaps after high expectations were dashed, investors calmed down and believed that his election as chairman would essentially help Bitcoin become a national strategic reserve asset more quickly. Coupled with his subsequent statement, Bitcoin once rose to nearly $107,000.
Later, as the news of the latest cryptocurrency executive order signed by Trump came out, Bitcoin rose three times in the short term. According to Fortune, Trump clearly supported the responsible growth of the crypto industry in the executive order, and proposed to explore the establishment of a national digital asset reserve, while prohibiting government agencies from issuing CBDCs and abolishing SAB 121 that prevents institutions from holding cryptocurrencies. Although the introduction of this policy is generally positive, there is still uncertainty about the implementation of its details, which has led to differences in market interpretation. Bitcoin did not break through the previous high point and fell again, and once touched around $102,000 in the early morning, almost giving up all the gains of the whole farce.
According to Coinglass data, after just a few hours of "up and down", although the price of Bitcoin did not change much, the value of open contracts in the contract market had a significant decline, and many investors were once again struck out by the ruthless market.
What will happen to Bitcoin next?
After the violent fluctuations on Thursday, Bitcoin rose again during the U.S. trading session on Friday, but quickly fell back after hitting $107,000 again. It fluctuated slightly around $104,000 to $105,000 during the weekend.
There is no doubt that after Trump officially takes office, the Web3 industry will receive unprecedented policy support, which is a fact that will help drive prices up from any perspective. However, judging from the frequent positive news in the past week, the price has been blocked near $107,000 many times, so investors have reason to guard against the risk of callback in the short term.
In the past two or three months, the price of Bitcoin has always been between $90,000 and $110,000. The market may need new reasons to finally choose a direction. The author needs to remind you that although Trump's coming to power will benefit the Web3 industry, Bitcoin and other cryptocurrencies, as risky assets, will still be affected by macroeconomic changes first. Whether Trump's policies are good or bad for the US and even the world economy, and whether his promises will really be fulfilled one by one, remains to be seen.
Before expecting Bitcoin to continue to hit $110,000, $120,000 or even $150,000, we also need to guard against extreme situations similar to "519" in 2021. At the end of 2021, Bitcoin was still nearly 10% higher than its high in March of that year, but it did not prevent the drastic price fluctuations that occurred in the middle.
