Bitcoin News Today: Bitcoin's Price Plunge Mirrors Trump's Fading Political Influence

Bitcoin's continued dominance over the cryptocurrency market is underscored by the Altcoin Season Index, which remains firmly at 24, signaling that Bitcoin retains control of capital flows and investor sentiment. The index, developed by CoinMarketCap, measures whether 75% of the top 100 cryptocurrencies have outperformed Bitcoin over a 90-day period. A reading closer to 100 indicates an altcoin season, while lower values reflect Bitcoin's supremacy. With the index at 24, most altcoins are struggling to keep pace, reinforcing Bitcoin's role as the primary driver of market cycles according to analysis.

The current Bitcoin season reflects broader macroeconomic and political dynamics. Economist Paul Krugman recently argued that Bitcoin's recent price decline is tied to waning support for Donald Trump, who had championed crypto-friendly policies. Krugman noted that Bitcoin's price had effectively become a "bet on Trumpism," and as Trump's influence dims, so does Bitcoin's allure. This narrative aligns with historical patterns where Bitcoin's performance is closely linked to Trump's political trajectory, including a surge to record highs following his 2024 election victory according to Krugman.

Meanwhile, institutional investors are cautiously optimistic. BlackRock's iShares Bitcoin Trust ETF (IBIT) holders recently returned to profitability as Bitcoin reclaimed $90,000, according to Arkham analytics. The fund's unrealized gains reached $3.2 billion, a rebound from a low of $630 million in mid-November. This shift suggests that ETF-driven demand, a key catalyst for Bitcoin's 2025 rally, may stabilize as the year-end approaches.

However, technical indicators paint a mixed picture for Bitcoin's near-term prospects. On-chain data reveals that while Bitcoin's $84,000 cost-basis cluster provides a strong support floor, liquidity remains thin above this level. Glassnode analysts highlighted that short-term holders (STHs) are still trading below their cost basis of $104,600, and daily realized losses average $403 million. For a sustained rally, bulls must see improved spot demand and a reversal in STH profitability.

Backtest the impact of Bitcoin with MACD Golden Cross, from 2022 to now. The Altcoin Season Index's low reading also highlights the challenges facing altcoins. Despite Bitcoin's dominance, a few projects have outperformed the leading cryptocurrency in recent months. Aster (ASTER) surged 1,266%, Zcash (ZEC) rose 1,043%, and Dash (DASH) gained 137%. However, these gains are outliers in a market where most altcoins lag. Analysts warn that without a broader shift in risk appetite or regulatory clarity, altcoin seasons remain elusive.

Looking ahead, the path to the next altcoin season hinges on several factors. Historical patterns suggest that prolonged Bitcoin dominance often precedes altcoin rallies, but triggers such as regulatory developments or technological breakthroughs are needed to rekindle investor enthusiasm. For now, the Altcoin Season Index at 24 serves as a clear signal for investors to prioritize Bitcoin while monitoring altcoin fundamentals for potential entry points according to Bitcoin World analysis.