Potential BTC Rebound Looms if Price Holds Above $88k Ahead of Trump’s Inauguration

  • In the lead-up to Donald Trump’s inauguration, Bitcoin (BTC) is witnessing crucial market behaviors that could signal significant price movements.

  • Recent analyses indicate that Bitcoin’s short-term holder market-value-to-realized-value (MVRV) ratio is at a pivotal point, suggesting potential volatility.

  • According to CryptoQuant analyst Axel Adler, “Currently, the STH Realized Price stands at $86.8K, suggesting a bullish trigger if demand persists.”

As Bitcoin approaches Trump’s inauguration, a strong rebound or a potential downturn hinges on key market indicators and trader sentiment.

Technical Indicators Signal Critical Rebound Potential for Bitcoin

The upcoming inauguration of Donald Trump is stirring market dynamics for Bitcoin, which is trading near critical support levels. The short-term holder’s (STH) MVRV ratio has seen a notable retreat to an inflection point, sparking discussions among analysts about imminent price movements. As of now, the STH’s realized price is marked at approximately $86,000.

Impact of Trump’s Policies on BTC Valuation

Historical patterns suggest that Trump’s presidency could have a substantial impact on Bitcoin prices. If demand holds steady leading up to the inauguration, there’s potential for the STH realized price to rise towards $90,000, which could ignite bullish momentum. The confluence of Trump’s policy announcements and investor sentiment is crucial in determining whether Bitcoin can maintain its momentum past the critical $88,000 level.

BTC STH MVRV Chart

Source: CryptoQuant

Market Sentiment and Options Trading Strategies

As anticipation builds, options traders are adjusting their positions, reflecting both bullish and bearish sentiments. Recent trading activity has seen a notable uptick in hedging strategy implementation, particularly through put options, as traders brace for volatility surrounding the inauguration.

Analyzing the Impact of Options Market on Bitcoin Prices

The latest data on 25-Delta Risk Reversal (25RR) indicates a stronger preference for protective measures against potential declines, with significant hedging activity observed leading up to January 20th. This systemic adjustment is compounded by market concerns regarding how political developments might ripple through the crypto landscape. The options for January 31st showed a slight bullish tilt, indicating expectations of increased volatility followed by a stabilization phase.

Options Market BTC Trends

Source: Amberdata

Conclusion

In summary, Bitcoin’s ability to maintain the critical support level of $88,000 prior to or after Trump’s inauguration will be pivotal for its market trajectory. Should it manage to hold above this benchmark, a bullish rebound might follow, while a drop could indicate potential sell-off risks. Market actors are advised to remain vigilant, as these developments will shape the immediate future of cryptocurrency valuations.

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