Author: Alex O'Donnell, CoinTelegraph; Compiled by: Tong Deng, Jinse Finance
According to historical market performance data from US presidential election years, the bullish momentum in the cryptocurrency market may slow down after Donald Trump, the elected US president, takes office on January 20, 2025.
According to data from Bloomberg and research firm Macrobond Financial, in the US, stocks and cryptocurrencies such as BTC have performed well in the weeks following a presidential election, and then cooled down after the elected president took office.
Data from research group TS Lombard shows, this is particularly evident when the incumbent president is a Republican. Republicans are generally seen as more business-friendly, leading to greater market excitement after the election.
According to reports, Citigroup's US equity strategist Scott Chronert wrote in a research report in November that "if the S&P 500 exceeds our year-end bull market target of 6,100, investors should tactically retreat from the post-election bounce, which is roughly in line with the 5% gain in the index since Election Day."
The data shows that market performance rebounds after an initial adjustment following the inauguration.
Post-election rally
Google Finance data shows that as of December 2, the S&P 500 index was at 6,047 points, up nearly 4.5% since November 5.
Cointelegraph Research states that BTC saw a significant rally after Trump's election, with many saying his victory would benefit the industry.
The price of BTC in particular has risen sharply, with the world's most popular cryptocurrency gaining over 30% after the election. Solana also saw similar gains.
Other analysts believe that the rally in BTC will continue after the inauguration, although it will be bumpy along the way. Bitget Research chief analyst Ryan Lee said that BTC price may correct up to 30% before resuming its bullish trend.
The analyst pointed out on November 27 that "historical data trends show that BTC may still correct up to 30% before reaching its cyclical high."
Assuming such an adjustment would bring BTC price to around $70,000 per coin.
Web3 investment firm MV Global noted that investors expect the crypto bull market to continue until 2025, peaking in the second half of the year.
Weakening correlation?
Binance Research states that historically, BTC has been "considered a high-risk asset closely correlated with the US stock market" - especially the Nasdaq tech stock index - but this relationship has weakened in recent months.
Binance said: "Since March 2024, the 30-day rolling correlation between BTC and Nasdaq has dropped to 0.46, one of the lowest levels in the past five years."
However, a correlation of nearly 50% with the US stock market means BTC faces a significant risk of broader market downturn.
According to data from MacroAxis.com, the correlation between Ethereum (ETH) and the Nasdaq index is even higher, at around 0.66.
