Bitcoin Bulls Might Have to Stomach a Sell-Off Before Trump's Deregulatory Agenda Sends the Cryptocurrency Higher

Crypto bulls are expecting President-Elect Donald Trump's deregulatory agenda to send bitcoin higher this year. But they might first have to stomach a sell-off.

Crypto bulls are expecting President-Elect Donald Trump's deregulatory agenda to send bitcoin (CRYPTO: BTC) higher this year. But they might first have to stomach a sell-off.

That would happen if the flagship token breaks below the $90,000 mark, and the risks of this are real, Standard Chartered said in a Tuesday note.

"We think that a clean break below USD 90,000 for BTC would open up 10% of further downside near-term, to the low USD 80,000s. Prices of all other digital assets would likely follow," wrote Geoff Kendrick, the global head of digital assets research. In this scenario, it's entirely possible that forced or panic selling could amplify an ongoing sell-off currently driven by economic concerns.

Although bitcoin's price briefly reached as high as $97,000 on Tuesday, the currency was trading near the key threshold just one day prior. Alongside other crypto assets, the token has wavered dramatically this year as a risk-off sentiment has taken over investors. According to commentary from FXPro, the crypto market capitalization dropped to its lowest in three and a half weeks as of Monday evening.

Some of this stems from the same factors plaguing stocks and bonds. Bitcoin is down over 10% from its $108,000 all-time high reached last month, suffering a downturn when investors began suspecting tighter monetary policy in 2025. Bitcoin will typically decline when interest rates are high.

But from here, any further downturn in crypto assets would be a self-fulfilling prophecy, Kendrick noted.

Spot ETF investors who have bought into bitcoin since the November presidential election now face an absolute profit of zero, given the recent price swings. That remains true as long as bitcoin remains above $90,000 — but a deeper decline will trigger investors to ditch the investment in panic, Kendrick said.

"When prices rise, selling tends to come mostly from long-term holders taking profit. When prices fall, selling tends to come more from short-term holders selling at a loss. On-chain data shows that in recent days, 50-70% of sales have been at a loss," he wrote.

What would make bitcoin fall below the support level? While Wednesday's key inflation report will play a major role in the immediate term, bullish policy expectations could set the market up for disappointment in the coming weeks.

Since Donald Trump was elected president, the market enjoyed a rush of buying amid excitement for crypto-friendly policies. The incoming administration has pledged to overhaul regulation, pass key legislation, and never to sell bitcoin held by the government. But if such changes are made quickly, Kendrick said, investors may feel let down.

If a correction does take bitcoin to the low $80,000s, the token would suffer a roughly 17% decline from Tuesday's high.

However, FxPro chief market analyst Alex Kuptsikevich predicted on Monday that deflating risk appetite could deepen a future decline — a negative scenario would pull bitcoin back to $74,000. To be sure, bitcoin has held its ground since Monday's low point, bolstering recovery prospects.

Over the long term, both analysts still see a healthy bull case for the apex token. Since last year, Kendrick has projected that bitcoin can reach $200,000 by the end of the year as institutional demand for crypto recovers under Trump policies.