Bitcoin’s (BTC) January Struggles: What History Tells Us About Its Next Move

• Bitcoin plunges 7% to $95K, testing crucial support; a drop below could extend losses to $90K, fueling bearish sentiment.
• Trump’s critique of high interest rates revives talk of a weak dollar, which could set the stage for a Bitcoin rebound.
• BlackRock’s $569M Bitcoin investment highlights unwavering institutional confidence despite market volatility.

The price of Bitcoin (BTC) has recently taken a tumble and has fallen from the $102,000 mark to the $95,000 mark. This 7% decline has triggered some concerns among investors since the asset remains under pressure thus trading through lower highs and lower lows. According to Rover, this movement is a significant challenge for Bitcoin, because it comes to a very essential level, a historical pivot point acting as either support or resistance. If Bitcoin rises past this level, it could fall to $90,000, extend the current bearish trend.

Bitcoin’s Cyclical Patterns

In the past, January has been a tough month for BTC and particularly so after the U.S. election years. Pundits argue that this is typical of the cycle of BTC price which has a tendency to stagnate and experience corrections in the middle of a cycle. Despite this January slump coinciding with Bitcoin’s well-documented four-year cycle, the cause of the cryptocurrency’s decline is still unknown. 

Source: CryptoRover

The recent comments by Donald Trump on the economic policy have given another perspective to Bitcoin. Trump blasted high interest rates, which was a stance he had taken during his first term in 2017 when he said the dollar was too strong. 

In that case, his comments came just before a major depreciation of the dollar and a strong run-up in the price of bitcoin. Trump’s position on the economy is another topic of concern; many think it could lead to a similar environment, since a weak dollar generally results in strong BTC.

Institutional investors seem unfazed by the recent slide in prices, however. In the price drop, the global largest asset manager, BlackRock stated that it had invested $569 million worth of BTC. This massive investment continues to show institutional investors’ belief in the future of BTC even as the retail investor remains shy. Some market watchers, however, said that BlackRock’s decision is a sign that Bitcoin is increasingly being seen as an investment asset that can be added to a portfolio.

Ethereum’s Growth Potential

The altcoin market, in contrast, is giving signals of possible development, as the main parameters point towards a shift in the market dynamics. In the same way, Ethereum and the rest of the altcoins, based on metrics such as the MVRV Z-score, look undervalued and ready to rebound. Experts think that altcoin market may replicate Bitcoin’s performance during the 2020-2021 period, which was very bullish for other cryptocurrencies. 

Source: CryptoRover

Some investors might experience short term fluctuations, however, experienced investors and have reiterated that the fluctuations are normal for BTC market. This period of stagnation often comes before a period of growth, so the current uncertainty might be the best opportunity to start preparing for the upswing. The attention is still on the levels and the signals which is crucial for the decision making as the BTC price continues to fluctuate.