Bitcoin, the undisputed star of the world of cryptocurrencies, has been on a roller coaster ride for several months. Its price is hovering around $97,000 this Monday, after being close to its historic record of $99,500 last Friday. An impressive journey for this digital asset which was still trading at $55,000 in August 2023. This meteoric rise finds its origin in a major political event: the election of Donald Trump as President of the United States.
The Trump effect: an unexpected catalyst
Bitcoin began its wild ride on November 5, the day of Donald Trump’s victory. The new American president, a fervent defender of cryptocurrencies during his campaign, has breathed a wind of optimism into the market. His promises of a more favorable regulatory framework attracted investors. In a few weeks, the value of bitcoin soared by more than 30%, driven by this surge of enthusiasm.
The president’s statements in favor of cryptocurrencies have created a virtuous circle. Institutional investors invested massively, followed by individuals. This dynamic has propelled bitcoin to all-time highs. However, a major obstacle persists: the symbolic milestone of $100,000 remains elusive.
The $100,000 barrier: more than just a number
Omid Malekan, professor at Columbia Business School, highlights a fascinating phenomenon: the psychological impact of round numbers on financial markets. The $100,000 is more than just a numerical value. This symbolic bar crystallizes the hopes and fears of investors. It acts as a major technical and psychological resistance.
The volatility of bitcoin increases as it approaches this critical threshold. Price movements become more erratic, reflecting the hesitation of market participants. This nervousness was evident last week when bitcoin came close to $99,500 before falling back sharply. A pattern that has been repeating itself for several weeks.
A changing market
The bitcoin investor landscape is undergoing a profound transformation. Blockchain specialist Anndy Lian observes a significant shift. The “whales”, these large investors capable of moving the market, are gradually giving way to individuals. This democratization could paradoxically stabilize prices in the long term.
Individual investors adopt different strategies from institutional players. Their smaller, but more numerous, transactions create a more regular flow. This new dynamic could reduce the sudden movements characteristic of “whale” interventions. However, profit taking remains significant. Last Monday, the market recorded its first capital outflow in five days, with more than $438 million withdrawn.
Analysts at Galaxy Digital suggest that once this profit-taking is complete, bitcoin could find a new lease of life. The cryptocurrency is currently seeking its base of support, a stable price level that would serve as a springboard for future increases. Trump’s continued influence on the market and the evolving regulatory environment will play a determining role in the coming weeks.
- Bitcoin, boosted by the election of Trump, has gained more than 30%, but stumbles over $100,000
- This psychological resistance causes massive profit taking near the threshold
- The democratization of the market, with the arrival of individuals, could stabilize prices in the long term
