Bitcoin’s Long-Term Outlook: How Positive U.S. Government Stance Could Reverse Short-Term Bear Market Trends

In a recent analysis by CoinDesk’s James Van Straten, the cryptocurrency market appears to be exhibiting bear market tendencies; however, the evolving stance of the U.S. government towards crypto assets is projected to foster long-term gains for Bitcoin. Following the inauguration of President Trump on January 20, Bitcoin’s price experienced a significant decline from $109,000 to $80,000, adhering to a common market behavior known as ‘sell the news’ phenomenon. This price motion draws parallels to the aftermath of the U.S. spot Bitcoin ETF launch in January 2024, where Bitcoin saw a remarkable uptick of over 40% from October 2023 to January 2024, only to correct by 20% once the ETF became operational. Historically, moments of substantial positive news tend to drive local price peaks, followed by notable corrections. Although the current trends hint at short-term bearishness, the constructive shifts in government policy regarding digital currencies herald optimistic prospects for Bitcoin’s future.