Donald Trump’s victory in the presidential elections sparked a bullish sentiment among crypto investors, looking forward to the inauguration day. However, after an impressive rally, cryptocurrencies are cooling off and raising concerns of a possible “sell the news” event.
Crypto analysts have weighed in on this matter, warning of a visible market fatigue, and potential top signals. Among these analysts, Arthur Hayes believes that investors’ expectations for Trump’s administration may be misaligned to reality.
“I think there exists a wide gap between crypto investor’s high expectations for how quickly Trump can change things and the reality that there are no politically acceptable solutions available to Trump to quickly bring about such change. The market will instantly wake up to the reality that Trump has at best one year to enact any policy changes on or around January 20th.”
– Arthur Hayes on “Trump Truth”
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In this context, Hayes goes further, forecasting that “this realization will lead to a vicious sell-off in crypto.” Arthur Hayes is BitMEX founder and a known crypto whale investor, usually presenting a high-time frame bullish stance. Nevertheless, Finbold reported two occasions when he publicly displayed a bullish position just to immediately dump part of his holdings.
The crypto bull case for Trump’s inauguration in Q1 2025
Following Hayes’s bearish commentary, Stats (@punk9059) asked his 111,000 followers if the executive was being overly bearish.
On that, people reminded that “Arthur was bullish at the 2021 top”, and that his “predictions often miss.” According to X commentators, Hayes “got a bunch wrong in 2024” and the current stance seems indeed “overly bearish.”
In a related note, Aporia (@0xaporia) called out contrarian traders saying “everyone thinks Q1 will be bullish, so it won’t.” The analyst explained that being contrarian exposes a “lack of systemic approach” and also an “inflated ego”.
Notably, Aporia shared an historical chart pattern of Bitcoin’s (BTC) performance in the first quarter of the year that follows the mining halving – supporting his bull case for Q1 2025 in opposition of contrarian traders that are showing a bearish bias pre-Trump’s inauguration day, like Hayes.
As observed, Bitcoin has seen a massive price surge in the post-halving Q1, which could play out again in 2025.
However, it is worth noting that past performance can not guarantee future price action. Traders and investors should be able to analyze current data and reality before making important financial decisions, considering all perspectives and insights.
For example, Finbold just reported an up-to-date technical analysis from Ali Martinez suggesting BTC is far from a bear market. Yet, cryptocurrencies could still briefly retrace on Trump’s inauguration day and beyond if the currently high expectations are not met. This could cause a “sell the news” event despite a potential and likely bounce up, maintaining the 2025 bull market.
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