Bitcoin is influenced more by global liquidity than by politics
Bitcoin price movements are often linked to presidential changes or political developments in the United States.
However, historical data shows that political factors are not the primary determining factor for the price of the world’s largest cryptocurrency. The state of global macroeconomic liquidity is far more influential.
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Currently, there are three major factors causing concern among market participants. First, inflation continues to fluctuate, creating uncertainty regarding monetary policy.
Second, there is the development of unemployment, an indicator of economic strength. Third, there is the rise in the US dollar index (DXY), which is closely linked to the price movements of high-risk assets, including Bitcoin.
Analysis of historical data shows that the movement pattern of the DXY repeats in certain cycles. In the previous period, the dollar index reached a peak in January 2017, at the beginning of Donald Trump’s first term. A similar pattern is expected to repeat in January 2025, leading many analysts to believe the market is currently in a consolidation phase.
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Data also shows that Bitcoin’s performance during the last two presidential terms, after 524 days in office, is comparable.
During President Joe Biden’s term, Bitcoin fell by approximately -43.8 percent. During Donald Trump’s first term, on the other hand, the decline was approximately -41.1 percent.
This similarity reinforces the view that Bitcoin’s performance is influenced more by economic cycles and liquidity conditions than by the current administration.
Based on this pattern, the market is expected to remain relatively stable until the end of this year. However, this period of stagnation is seen as preparation for a potentially larger bull market cycle in 2027, if historical patterns repeat and are supported by improving global liquidity conditions. ***tok
