Author: Alex O’Donnell, CoinTelegraph; Translator: Deng Tong, Jinse Finance
According to historical market performance data from U.S. election years, the bullish momentum in the cryptocurrency market may slow down after Donald Trump is inaugurated as president on January 20, 2025.
According to data from Bloomberg and researcher Macrobond Financial, in the U.S., stocks and cryptocurrencies like Bitcoin perform well in the weeks following a presidential election, then cool down after the elected president takes office.
Data from research group TS Lombard shows that this is particularly evident when the sitting president is a Republican. Republicans are generally perceived as more business-friendly, which triggers greater market excitement post-election.
According to reports, Citigroup U.S. equity strategist Scott Chronert wrote in a research report in November: 'If the S&P 500 exceeds our year-end bull market target of 6,100 points, investors should strategically retreat from the post-election rebound, which is roughly consistent with the index's 5% increase since Election Day.'
Data shows that the market rebounded after an initial adjustment following the inauguration.
Post-election rally
Google Finance data shows that as of December 2, the S&P 500 index stands at 6,047 points, having increased nearly 4.5% since November 5.
Cointelegraph Research indicates that cryptocurrencies surged significantly after Trump's election, with many stating that his victory would benefit the industry.
The price increase of Bitcoin is particularly notable, with the world's most popular cryptocurrency rising more than 30% post-election. Solana also achieved similar gains.
Other analysts believe that Bitcoin's upward trend will continue after the inauguration, although there will be bumps along the way. Bitget Research's chief analyst Ryan Lee stated that the BTC price may correct by 30% before restoring a bullish trend.
The analyst pointed out on November 27: 'Historical data trends indicate that Bitcoin may still correct by as much as 30% before reaching a cyclical peak.'
It is assumed that such an adjustment would bring the Bitcoin price down to around $70,000 each.
Web3 investment firm MV Global points out that investors expect the cryptocurrency bull market to continue until 2025, peaking in the second half of the year.
Weakened correlation?
Binance Research states that historically, Bitcoin has been 'considered a high-risk asset closely related to the U.S. stock market'—especially the U.S. tech stock index Nasdaq—but this relationship has weakened in recent months.
Binance stated: 'Since March 2024, the 30-day rolling correlation between Bitcoin and the Nasdaq has dropped to 0.46, one of the lowest levels in five years.'
Nevertheless, the nearly 50% correlation with the U.S. stock market means that BTC faces significant risks from broader market downturns.
According to data from MacroAxis.com, the correlation of Ethereum (ETH) with the Nasdaq index is even higher, around 0.66.
