Bitcoin under Trump: Why the Expected Rally Is Missing

Since Donald Trump’s return to the White House in January, Bitcoin has reached new all-time highs, but the market dynamics differ significantly from expectations. Instead of a strong upward trend, the leading cryptocurrency has mostly moved sideways, while the overall market structure is increasingly bearish. With a current price of approximately $95,470 and a decline of 1.73% in the last 24 hours, market sentiment appears subdued.

Why 2024/2025 is not comparable to 2016

The research institution XWIN Research Japan has conducted an insightful comparison between Trump’s two election victories. The key finding: the circumstances then differ fundamentally from today.

After Trump’s victory in 2016, low inflation rates and interest rates prevailed – an ideal environment for capital inflows into the still-small crypto market. These conditions enabled rapid speculative accumulation and generated sufficient liquidity for a long-term upward trend.

Today, it looks different. In early 2025, the market is operating in a high-interest phase with strained financial conditions. Additionally: the crypto market has grown multiple times larger. This larger market capitalization and broader institutional participation mean that political events alone are no longer sufficient to significantly move Bitcoin – especially under liquidity pressure.

The SOPR ratio sends warning signals

A deeper look at on-chain metrics reveals additional challenges. The Bitcoin SOPR ratio (Spent Output Profit Ratio) shows a divided investor behavior:

Long-term holders (LTH) actively realize their modest gains, while short-term holders (STH) operate at a loss. Historically, this configuration indicates that the market is on the verge of major shifts in supply and demand. The analysis suggests that Bitcoin is currently within a fundamental bear trap.

Where it could go

XWIN Research identifies two critical factors for a possible recovery: First, Bitcoin ETF inflows would need to stabilize, and simultaneously, LTH outflows would have to decrease significantly. As long as this does not happen in sync, Bitcoin is likely to remain in its current lethargy or even slide further downward.

The coming weeks will be decisive – not only for the price but for confidence in the thesis of a Trump rally.