Bitcoin (BTC) recently reached an all-time high of $108,364, only to drop to $92,118 within three days. This sharp price decline coincides with increasing political instability in the U.S., as the federal government faces the possibility of a shutdown. Despite the downturn, some predict the emergence of a "God candle" that could mark bitcoin's most impressive recovery to date.
Bitcoin plummets: Could Trump's policies spark a cryptocurrency comeback?
In recent days, the cryptocurrency market has proven as unpredictable as the U.S. political landscape. The impending U.S. government shutdown stems from stalled spending negotiations, a situation that has historically affected the market in various ways.
For instance, the S&P 500 has sometimes recorded modest gains during previous shutdowns. Meanwhile, bitcoin and the broader cryptocurrency space have even shown more unpredictable patterns in similar cases.
Adding to the allure, Arthur Hayes, former CEO of Bitmex, recently predicted a "catastrophic sell-off" in the cryptocurrency market around Donald Trump's Inauguration Day. He suggests this is due to short-term disillusionment among market participants.
Former 'Pharma Bro' Martin Shkreli is extremely pessimistic about bitcoin. Recently, he claimed that Michael Saylor of Microstrategy might face liquidation, and he further suggested that bitcoin (BTC) could wander aimlessly for a long time, potentially for years. He also warned that people should not count on Trump fulfilling his commitments, implying that he might not. However, some people simply dismiss Shkreli's views with a nonchalant shrug.
These views contrast with the optimism of those who believe Trump's return could ignite another legendary God candle — a term describing a significant price increase in a single day that overshadows surrounding activity on the chart. While Hayes' warnings have dampened cryptocurrency supporters' spirits and Shkreli's claims have been dismissed, Trump supporters remain hopeful.
Whether you support Trump or not, it can be argued that the possibility of his return to power, along with cryptocurrency-friendly policies and the idea of a strategic U.S. bitcoin reserve fund, could trigger a significant recovery in the cryptocurrency market. It is likely that the sharp drop Hayes predicted is happening right now, as I write this, with prices expected to rebound if Trump implements such measures.
This would reverse Hayes' predictions. It is very possible that the current downturn is a temporary lull — a period of depreciation within a larger bull market cycle. Bitcoin could stage a massive recovery if the U.S. resolves its budgetary challenges by 2025 and Trump implements some bitcoin-focused strategies to encourage the market.
Such events could ignite a second wave of God candles after or during Trump's inauguration, reshaping market dynamics and unleashing unprecedented growth. However, at present, bitcoin's immediate price trajectory remains unclear. Whether Trump's presidency will usher in the anticipated boom is still uncertain, but the cryptocurrency community is watching with bated breath.
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