Author: Techub Exclusive Interpretation
Writer: Tia, Techub News
On Thursday night Hong Kong time last week, the cryptocurrency market experienced violent fluctuations within a few hours, with mainstream cryptocurrencies such as Bitcoin and Ethereum experiencing sharp rises and falls within a few hours, while Altcoins showed clear differentiation, with some prices doubling in a short period of time and then rebounding slightly, while others "did not follow the rise but followed the fall", setting new lows for the period.
The reason for this is that the United States has been reporting frequent breakthroughs in cryptocurrency policy improvements, but the reason for such violent fluctuations is that different people have different understandings of these news...
"The big one is coming! I'm going to be the group leader!"
The dynamics of U.S. Senator Cynthia Lummis were undoubtedly one of the core driving forces behind last night's market performance. As the proponent of the Bitcoin National Strategic Reserve proposal, Lummis released a thought-provoking hint 15 minutes before the U.S. stock market opened: "Big things are coming (₿)."
Many investors speculated that the Bitcoin strategic reserve proposal might be passed soon. After the U.S. stock market opened, Bitcoin rose more than 2.5% in 15 minutes. However, the so-called "big one" was just Lummis' confirmation of being elected as the chairman of the U.S. Senate Digital Asset Subcommittee. The huge psychological gap caused Bitcoin to then fall more than 3% in 15 minutes, staging a "roller coaster" market.
However, the decline in Bitcoin did not last, perhaps because after the high expectations were disappointed, investors calmed down and believed that her election as chairman was essentially beneficial for Bitcoin to become a national strategic reserve asset faster, and after her subsequent statement, Bitcoin once rose to nearly $107,000.
Subsequently, with the news of Trump's latest cryptocurrency executive order being released, Bitcoin rose sharply three times in the short term. According to Fortune, Trump's executive order explicitly supports the responsible growth of the cryptocurrency industry in the order, and proposes to explore the establishment of a national digital asset reserve, while banning government agencies from issuing CBDC and abolishing SAB 121 that prevents institutions from holding cryptocurrencies. Although the introduction of this policy is generally positive, the details of its implementation are still uncertain, leading to divergent market interpretations, and Bitcoin did not break through the previous high and fell again, and at dawn it once touched around $102,000, almost giving back the entire rise of the drama.
According to Coinglass data, although the price change of Bitcoin was not large after the "ups and downs" in just a few hours, the value of open interest contracts in the contract market has declined quite significantly, and many investors have been ruthlessly struck out by the market again.
How will Bitcoin perform going forward?
After the violent fluctuations on Thursday, on Friday during U.S. trading hours, Bitcoin rose again, but quickly fell back after touching $107,000 again, and fluctuated slightly around $104,000 to $105,000 during the weekend.
Undoubtedly, after Trump officially takes office, the Web3 industry will receive unprecedented policy support, which is a fact that will help drive up prices from any angle. But looking at the situation where good news has been frequent in the past week, but the price has been repeatedly blocked around $107,000, investors have reason to guard against the risk of a short-term correction.
Over the past two to three months, the price of Bitcoin has remained in the range of $90,000 to $110,000, and the market may need new reasons to ultimately choose a direction. The author needs to remind that although Trump's taking office will be positive for the Web3 industry, cryptocurrencies such as Bitcoin, as risky assets, will still be primarily affected by macroeconomic changes, and whether Trump's policies are good or bad for the U.S. and the world economy, and whether the promises he has made will actually be fulfilled, remain to be seen.
Before expecting Bitcoin to continue to hit $110,000, $120,000 or even $150,000, we also need to guard against the occurrence of extreme situations similar to the "519" in 2021. At the end of 2021, Bitcoin was still nearly 10% higher than its high point in March of that year, but that did not prevent the violent fluctuations of a halving of the price in between.
