Against widespread expectations, the second term of Donald Trump as the US President has yielded a positive effect on Bitcoin’s price. While the flagship cryptocurrency has recorded an all-time high since Trump’s inauguration in January, the market has mostly been in consolidation and range-bound phase, with the broader picture still taking on a bearish form. Crypto analysis page XWIN Research Japan recently offered a comparative analysis with the post-election euphoria seen in 2016, to explain why the post-2024 price action is without enthusiasm.

In the Quicktake post on CryptoQuant, the research and education institution draws a critical comparison between the 2016 and 2024 post-election periods. Just after Trump’s victory in 2016, the crypto market operated within a low-inflation and low-interest-rate environment, one that is ideal for a market with growing liquidity. Also, the crypto market’s relatively small size allowed for quick accumulation of speculative liquidity. Hence, the market was able to get sufficient capital to serve as fuel for a prolonged, yet powerful, uptrend.

However, early 2025 saw a different market environment and dynamic. The year began and extended into a high-rate period, where financial conditions increasingly became crippling. Also, the larger market size (compared to the post-2016 election market), alongside increased participation among several investors, has structurally reduced the stand-alone importance of political events on price movements. Simply put, policy implementations can barely move Bitcoin’s price alone, especially when encumbered by more liquidity constraints.

XWIN Research Japan also references data obtained from the Bitcoin SOPR Ratio (LTH-SOPR/STH-SOPR), which reinforces the cautious stance among investors following Trump’s second inauguration. The Bitcoin SOPR Ratio deciphers market sentiment by comparing whether long-term holders are realizing profits more aggressively than short-term holders, serving as an important indicator of whether a price trend is driven by institutional conviction or speculative trading.

According to the research team, Bitcoin’s long-term holders (LTHs) are realizing their limited profits. Short-term holders, on the other hand, are trading within red territory. Historically, this condition is typically found when the market is about to embark on a prolonged journey of demand-supply adjustments.

Based on historical data, it becomes clear that Bitcoin is currently within a fundamentally bearish structure. Although XWIN Research elucidates that “as long as long-term holders maintain relative dominance and short-term holder selling is absorbed, downside may be supported,” but this came with a caveat that upside leadership would likely also remain restricted.

The analytics group further conjectures that a stable growth of Bitcoin ETF inflows, alongside a clear depreciation in LTH distribution, would be pivotal in rescuing BTC from its downward spiral. Until these happen simultaneously, bitcoin might remain in its current state of inertia, or — in the worst case — dive further south. At press time, Bitcoin holds a valuation of about $87,623, recording a slight 0.5% loss since the past week, and a 0.6% ascent since the last 24 hours, according to CoinMarketCap data. 

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