Bitcoin News Update: Bitcoin's Value Drops in Parallel with Declining Political Clout of Trump

Bitcoin Maintains Its Leading Position in the Crypto Market

The cryptocurrency landscape continues to be dominated by Bitcoin, as reflected by the Altcoin Season Index, which currently stands at 24. This low figure indicates that Bitcoin remains the primary focus for both capital allocation and investor confidence. The index, created by CoinMarketCap, evaluates whether 75% of the top 100 digital assets have outperformed Bitcoin over the past 90 days. A high score signals an altcoin season, while lower numbers highlight Bitcoin’s prevailing influence. With the index at 24, most alternative coins are underperforming, further cementing Bitcoin’s status as the market’s driving force.

Macroeconomic and Political Influences on Bitcoin

Bitcoin’s current dominance is shaped by broader economic and political trends. Economist Paul Krugman recently suggested that Bitcoin’s price drop is linked to declining support for Donald Trump, who has previously advocated for pro-crypto policies. Krugman described Bitcoin’s value as closely tied to the political fortunes of Trump, noting that the cryptocurrency surged to new highs following Trump’s 2024 election win. As Trump’s influence wanes, so does Bitcoin’s appeal, according to Krugman’s analysis.

Institutional Investors and ETF Performance

Institutional players remain cautiously optimistic about Bitcoin’s prospects. Investors in BlackRock’s iShares Bitcoin Trust ETF (IBIT) have recently returned to profitability as Bitcoin climbed back above $90,000. Data from Arkham analytics shows that the fund’s unrealized profits have reached $3.2 billion, a significant recovery from a low of $630 million in November. This rebound suggests that demand from ETFs, which has been a major factor in Bitcoin’s 2025 rally, could help stabilize the market as the year draws to a close.

Technical Outlook and Market Challenges

Despite these positive signs, technical indicators present a mixed outlook for Bitcoin’s short-term trajectory. On-chain analysis reveals that the $84,000 price level serves as a strong support zone, but liquidity above this threshold is limited. Glassnode reports that short-term holders are still operating at a loss, with their average cost basis at $104,600 and daily realized losses averaging $403 million. For a sustained upward trend, the market needs to see increased spot demand and a turnaround in the profitability of short-term investors.

Altcoin Performance and Market Dynamics

Backtesting Bitcoin’s impact using the MACD Golden Cross from 2022 to the present highlights the ongoing struggles of altcoins. While Bitcoin continues to outperform, a handful of projects have managed to deliver exceptional returns in recent months:

• Aster (ASTER): up 1,266%
• Zcash (ZEC): up 1,043%
• Dash (DASH): up 137%

These impressive gains are exceptions in a market where most altcoins are lagging. Analysts caution that without a significant shift in investor risk appetite or clearer regulatory guidelines, a widespread altcoin rally is unlikely in the near future.

Outlook for the Next Altcoin Season

Looking forward, the emergence of another altcoin season will depend on several key factors. Historically, extended periods of Bitcoin dominance have often set the stage for altcoin rallies, but catalysts such as regulatory changes or technological innovations are necessary to reignite investor interest. For now, with the Altcoin Season Index at 24, the prevailing advice is to focus on Bitcoin while keeping an eye on promising altcoin developments for potential opportunities, as highlighted by Bitcoin World analysis.