Bloomberg: Bitcoin recorded its biggest drop since the US election last weekend, and most of the positive news has been digested by the market

Bitcoin hit its biggest two-day drop since the US election last weekend, falling nearly 3% on Saturday and Sunday, before recouping some of the losses, trading at $90,394.2 as of press time. Uncertain factors affecting the market include the timeline for Trump to fulfill his promise to support cryptocurrencies, and whether all measures are feasible, such as establishing a US Bitcoin reserve. In the US stock market, the excitement over Trump's business-friendly stance is being suppressed by the risk of inflation from trade tariffs and deficit spending to fund tax cuts. Investors are lowering their expectations for Fed rate cuts, as the US economy is robust, which could be a barrier for the cryptocurrency market, as liquidity conditions affect speculative demand for digital currencies. IG Australia Pty market analyst Tony Sycamore wrote in a report that after the record-breaking rally since the November 5 election day, Bitcoin has become "overbought" and "its price rally has already priced in a lot of good news". JPMorgan's strategy team led by Nikolaos Panigirtzoglou wrote in a report that under the Trump administration, cryptocurrency legislation could be approved soon, which will prompt a shift in the regulatory approach from enforcement to a more collaborative manner. The team said banks can enjoy greater digital asset participation, and the market is also more hopeful that cryptocurrency ETFs will be approved, investing in cryptocurrencies other than Bitcoin and Ethereum. The strategists said regulatory clarity will provide a boost to venture capital, mergers and acquisitions, and initial public offerings. But they added that establishing a US Bitcoin reserve is a "low probability event".