Bitcoin’s Price Volatility: An In-Depth Analysis
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Bitcoin’s Recent Downtrend Amid US Tariff Announcements
Over the past two months, Bitcoin has experienced a significant decline, shedding more than 23% of its value. This downturn is largely attributed to the introduction of new US tariffs in February, March, and April. Despite the immediate negative impact of these macroeconomic changes, renowned cryptocurrency analyst Miles Deutscher suggests that these policy shifts might eventually propel Bitcoin towards long-term growth.
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Short-Term Volatility, Long-Term Potential: Bitcoin Poised for Growth
In a recent statement, Deutscher indicated that Bitcoin is on track to reach new all-time highs, even amid current market fluctuations. He elaborates that while recent economic policies implemented by the US government under President Donald Trump have temporarily dampened the market, the long-term implications could be favorable for Bitcoin.
Deutscher highlights that the intention behind these economic strategies seems to be to induce short-term volatility, potentially weakening the dollar and interest rates. Such a scenario could ultimately benefit Bitcoin and other cryptocurrencies. However, the introduction of new import tariffs might deter the purchase of US Treasury Bills, leading to increased reliance on domestic buyers and resulting in liquidity tightening. Given Bitcoin’s sensitivity to liquidity, this contraction could cause further price declines as investors seek safer assets.
As the market adjusts to recession fears, Bitcoin and other cryptocurrencies are expected to stabilize. When an official recession is declared, the Federal Reserve may respond with economic interventions. At this point, the US central bank might announce a rate cut, paving the way for potential quantitative easing (QE). Although QE might not occur until 2026, Bitcoin could benefit from enhanced dollar liquidity through other economic measures, such as repurchase agreements, the Bank Term Funding Program, and Treasury bill acquisitions.
Following these developments, Bitcoin is anticipated to embark on an upward trajectory. High-quality altcoins are likely to follow Bitcoin’s lead, while tokens with minimal utility may decline. As Bitcoin approaches a peak price, an altcoin season could emerge. Deutscher acknowledges the challenges in predicting short-term crypto market movements and US policies, but he projects that Bitcoin could reach new all-time highs between the third quarter of 2025 and the first quarter of 2026.
Current BTC Market Performance
At present, Bitcoin is trading at $83,313, reflecting a 0.90% weekly gain. However, the asset’s daily trading volume has decreased by 68.68%, standing at $14.25 billion.
Featured image from The Conversation, chart from Tradingview
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