Author: Alex O’Donnell, CoinTelegraph; Translated by: Deng Tong, Jinse Finance
Based on historical market performance data for U.S. election years, cryptocurrency market bullish momentum 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 United States, stocks and cryptocurrencies like Bitcoin performed well in the weeks following the presidential election, but cooled down after the elected president took office.
Data from research group TS Lombard shows that this is especially evident when the incumbent president is a Republican. Republicans are generally seen as more business-friendly, leading to 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 6100 points, investors should strategically retreat from the post-election rebound, which roughly aligns with the index rising by 5% 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 risen nearly 4.5% since November 5.
Cointelegraph Research states that cryptocurrencies surged significantly after Trump's election, with many suggesting that his victory will benefit the industry.
The price increase of Bitcoin is particularly notable, with the world's most popular cryptocurrency rising more than 30% after the election. Solana also achieved similar gains.
Other analysts believe that Bitcoin's upward momentum will continue after the inauguration, although there will be bumps along the way. Bitget Research chief analyst Ryan Lee stated that BTC prices may correct by 30% before regaining a bullish trend.
The analyst noted on November 27: 'Historical data trends indicate that Bitcoin may still correct by as much as 30% before reaching a cyclical peak.'
Such a correction is assumed to bring Bitcoin's price down to around $70,000 each.
Web3 investment firm MV Global points out that investors expect the cryptocurrency bull market to last until 2025, peaking in the second half of the year.
Weakened correlation?
Binance Research indicates 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 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.
