TL;DR
- Whale activity and social media speculation are causing high volatility in Bitcoin’s price, driving both sharp rises and drops.
- The price correction accelerated after the excitement surrounding Trump’s inauguration quickly dissipated, creating uncertainty in the market.
- Traders should be cautious, as optimistic mentions on social media can signal a market peak followed by a drop, benefiting whales who sell their assets.
On January 20, Donald Trump was inaugurated as the 47th president of the United States, marking his return to the White House after four years. The event generated significant enthusiasm in the cryptocurrency markets, pushing Bitcoin to new all-time highs of $109,300, thanks to expectations of a more tech-friendly administration. However, the enthusiasm surrounding the inauguration was quickly countered by a market correction, and over the past 24 hours, Bitcoin has dropped to $103,665, a decline of 3.63%.
Social Media Hype Ends in a Sharp Correction
Bitcoin saw a significant price spike, but this quickly deflated, dragging other cryptocurrencies down. The surge was fueled by speculation on social media platforms like X, Reddit, and Telegram, where higher price targets above $110,000 were being mentioned. According to Santiment’s analysis, mentions on these platforms indicated a potential price peak for Bitcoin.
This historical trend shows that when optimistic mentions of high prices dominate social media, a market peak often follows, followed by a sell-off driven by whales who sell to retail investors, who are caught up in greed and the fear of missing out (FOMO).
Currently, Bitcoin is priced at $103,665, representing a 3.63% drop in the last 24 hours, while other cryptocurrencies have also experienced notable losses. Ethereum (ETH) dropped to $3,283, down by 1.34%, while BNB fell by 0.43%, reaching $686. XRP, on the other hand, saw a sharper decline, falling by 5.68% to $3.10. Solana (SOL) and Cardano (ADA) also recorded significant losses of 5.15% and 7.24%, respectively, trading at $242 and $0.9907. In contrast, Dogecoin (DOGE) saw a slight rise of 0.31%, reaching $0.3746, while TRON (TRX) dropped by 2.7%, falling to $0.2412.
The Pullback and Unmet Expectations
It was expected that Trump’s inauguration speech would address topics related to cryptocurrencies, which could have further boosted enthusiasm around Bitcoin. However, the absence of comments regarding a potential strategic reserve of Bitcoin caused the cryptocurrency to quickly fall from its all-time high, dragging most altcoins down with it.
