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Contrary to popular expectations, Donald Trump's second term as US President has had a positive impact on the Bitcoin price. While the flagship cryptocurrency has posted an all-time high since Trump took office in January, the market has largely been in a consolidation and range-bound phase, with the general picture still taking a bearish shape. Crypto evaluation site XWIN Research Japan recently offered a comparative evaluation with the post-election euphoria in 2016 to elucidate why the value motion after 2024 is without enthusiasm.
Analyst explains why Bitcoin's structure may be very different from 2016
In the quicktake post on CryptoQuant, the research and academic institution draws a critical comparison between the 2016 and 2024 post-election periods. Shortly after Trump's election victory in 2016, the crypto market operated in an environment of low inflation and low rates of interest, which is good for a market with growing liquidity. Additionally, the relatively small size of the crypto market allowed for rapid accumulation of speculative liquidity. Therefore, the market was capable of raise sufficient capital to function fuel for a sustained but strong uptrend.
However, at first of 2025 there was a unique market environment and dynamics. The 12 months began and developed right into a period of high rates of interest, with financial conditions becoming increasingly crippling. Furthermore, the larger market size (in comparison with the post-2016 election market), coupled with increased participation from multiple investors, has structurally reduced the stand-alone importance of political events on price movements. Simply put, policy implementation alone can have little impact on the value of Bitcoin, especially when weighed down by further liquidity constraints.
The LTH-SOPR ratio further reflects caution
XWIN Research Japan also points to data from the Bitcoin SOPR ratio (LTH-SOPR/STH-SOPR), reinforcing investors' cautious stance following Trump's second inauguration. The Bitcoin SOPR ratio decodes market sentiment by comparing whether long-term holders are more aggressive in making profits than short-term holders, and serves as a key indicator of whether a price trend is driven by institutional belief or speculative trading.
According to the research team, long-term Bitcoin holders (LTHs) are realizing their limited profits. Short-term holders, alternatively, are within the red. Historically, this condition typically occurs when the market is about to embark on a lengthy journey of demand-supply matching.
Source: CryptoQuant
Based on historical data, it is obvious that Bitcoin is currently in a fundamentally bearish structure. Although XWIN Research clarifies that “so long as long-term holders maintain relative dominance and short-term holder selling is absorbed, downside moves could be supported,” albeit with the caveat that upside leadership would also likely remain constrained.
The evaluation group also believes that stable growth in Bitcoin ETF inflows together with a major weakening in LTH distribution could be crucial in rescuing BTC from its downward spiral. Unless this happens concurrently, Bitcoin could remain in its current state of inertia or, within the worst case scenario, plunge further south. At press time, Bitcoin is value about $87,623, marking a slight lack of 0.5% since last week and an increase of 0.6% because the last 24 hours, in keeping with data from CoinMarketCap.
BTC is trading at $87,637 on the each day chart | Source: BTCUSDT chart on Tradingview.com
Featured image from Pexels, chart from Tradingview
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