Bitcoin hits 2-month low: Can Trump’s rate-cut push lift BTC?

In current cycles, “liquidity” has emerged as a key driver not solely of asset costs but additionally of investor sentiment. On this context, U.S. President Donald Trump’s resolution to select a brand new Fed Chair is a assured market catalyst.

Or no less than in accordance with President Trump himself, it’s a transparent market catalyst. He’s been pushing for extra charge cuts, insisting they’d come “with none stress,” straight feeding the broader liquidity narrative.

However the query is: Is that sufficient to reverse Bitcoin’s [BTC] current FUD?

 Trump’s Fed decide faces the fact verify

From an financial standpoint, there’s extra to charge cuts than simply liquidity.

At a basic stage, they sign a slowing financial system, pushed by cooling shopper spending, rising unemployment, and weaker-than-expected macro information, forcing the Federal Reserve to ease coverage to assist progress.

Traditionally, Bitcoin has tended to rally throughout such easing cycles. On this context, BTC slipping again to a two-month low close to $80k matches squarely into the narrative of President Trump’s push for more rate cuts.

Supply: TradingEconomics

Nonetheless, the onerous information continues to problem this narrative. 

The U.S. Bureau of Labor Statistics’ December Producer Price Index (PPI) got here in at 3%, above the anticipated 2.7%, signaling that inflationary pressures stay elevated, leaving the trail for relieving unsure.

Naturally, the query arises: Is President Trump’s Fed Chair decide actually a catalyst for Bitcoin, or does it threat eroding already fragile confidence in his “crypto capital” imaginative and prescient as market skepticism continues to construct?

Bitcoin struggles as volatility overrides the narrative

Volatility stays the dominant pressure within the crypto market.

Notably, that dynamic has been particularly seen over the previous fifteen months of President Trump’s presidency. Whereas regulatory alerts have helped legitimize Bitcoin amongst buyers, they’ve completed little to dampen volatility.

Rand’s chart places this into perspective. Roughly two years into Trump’s presidency, most main high-cap crypto belongings noticed double-digit pullbacks, with Aptos [APT] struggling the steepest decline, down 82.3%.

Supply: X

From right here, it seems just like the market isn’t shopping for into the “crypto capital” narrative. For Bitcoin, that exhibits up on-chain, with cohorts capitulating and moving BTC to exchanges, regardless of ongoing hopes for charge cuts.

Therefore, the hole between idea and actuality is simply widening.

On paper, regulatory frameworks are reinforcing Bitcoin’s “hedge” standing. Nonetheless, in observe, macro volatility continues to shake the market, weakening confidence and blunting the impression of charge cuts on Bitcoin.

Ultimate Ideas

• Whereas President Trump promotes his new Fed Chair as a catalyst for Bitcoin, elevated inflation and weak macro information forged doubt on whether or not charge cuts can reverse current BTC FUD.
• Regardless of regulatory progress, on-chain metrics present macro volatility continues to dominate, highlighting the widening hole between idea and market habits.