Bitcoin Price Today Drops to $87K Amid Cooling Trump Rally; Dogecoin Declines from 3-Year High

Bitcoin Price Dips as Trump Rally Cools Amid Inflation Concerns and Dogecoin Profit-Taking

Bitcoin shot to record highs this week, ascending to within $1,000 of $90,000 before retreating, as the initial euphoria over Donald Trump’s election win starts to wear off.

Bitcoin and other cryptocurrencies had been flying with Trump’s pledge to turn America into a global crypto hub, presaging optimism on the likelihood of pro-crypto policies.

However, the market is now focusing on the anxiety over economic indicators and inflation rather than hype over post-election events.

Bitcoin’s Record Highs and Retreat

This week, Bitcoin touched an all-time high close to $90,000 as crypto markets reacted to the Trump win and the proposed policies by the latter only fuelled hopes of a friendly environment for digital assets in his administration.

His vision reportedly makes way for the possibility of even a national Bitcoin reserve, which its proponents argue would lend greater legitimacy to Bitcoin as an investment.

His crypto posture even went so far as to let expect regulatory constraints over digital assets to go easy under him, adding fuel to the rally.

But by Wednesday morning, Bitcoin pulled back, falling 1.2% to $87,366.3, as attention shifted toward the soon-to-be-released US inflation data and the lack of clarity surrounding Trump’s broader economic strategy.

Many investors are worried about inflation implications from Trump’s expected expansionary policies, which will likely sustain inflation levels at higher rates. Attention shifts now to CPI data later on Wednesday, expected to confirm persistent inflation in October.

This may not be good news for the optimists on lower interest rates, and this could squeeze the crypto sector as high interest rates lower investor appetite for speculative assets.

 Dogecoin: A Rollercoaster Ride After Trump Victory

Dogecoin was one of the major meme tokens and followed a similar pattern to Bitcoin: so much price increase was gained before giving up to profit-taking. Having risen to a three-year high, Dogecoin fell 8.3% on Wednesday at $0.355270 while trading.

Its recent rally partly has been driven by Trump’s unexpected announcement of tech billionaire Elon Musk and entrepreneur Vivek Ramaswamy to lead the newly formed Department of Government Efficiency, or DOGE.

It’s called by a playful name, Dogecoin, an apparent reference to Dogecoin. For one, the agency will somehow be outside the ambit of the government, somehow targeting bureaucratic inefficiency, reducing regulations, and curbing government expenditures.

Thus, even though the establishment of DOGE agency can be a cause for excitement in the crypto space, it is not apparent if Dogecoin will have an official role in its operations.

The value of the token has also been influenced by many of Musk’s social media platforms proclaiming support for the token.

Nevertheless, the recent slump of Dogecoin could indicate that sellers are covering their profit following the steep rise, especially that the price increase of Dogecoin was due to speculation after the foundation of DOGE agency.

Ripple Effect on Altcoins as Bitcoin Falls

The slump in Bitcoin’s price ripples across the broader crypto market. Several major altcoins have faced impacts.

For instance, Ether, one of the world’s second-largest cryptocurrencies, declined by 5% to $3,163.50 following its surge to a three-month high a day or two ago.

Other top cryptocurrencies include Cardano (ADA), Solana (SOL), XRP, and Polygon (MATIC), all of which have also skidded: a 4.7% loss, an 8.5% loss, an 11.5% loss, and an 8.5% loss respectively.

This bigger drop parallels the rather loose interrelationship in the crypto space, where changes in Bitcoin often are carried over into dynamics in altcoins.

The market is more cautious ahead of critical economic indicators. Many investors may be re-evaluating their altcoin plays especially following the recent surge.

 Inflation Fears and Trump’s Economic Reforms

Excluding crypto-specific news, though, one of the most discussed topics recently pertains to the release of U.S. CPI data.

Broadly undefined economic policies of the future administration by Trump might focus more on growth rather than restrictions, and such policies could lead to inflationary pressures.

Higher inflation will force the Federal Reserve to increase or sustain high levels of interest rates, which will not help the crypto market.

On support for Bitcoin and the wider cryptocurrency industry during his campaign, Trump made several references, though the specifics of those policies and economic implications remain unclear.

His victory first seemed to bring crypto enthusiasts much-needed hope, but investors today seem to wait for stronger messages about his stance, if his government will indeed reduce the regulatory hurdles on digital assets.

 Long-term Crypto Market Impact

Excitement for the crypto markets goes to Trump, and his concentration on crypto-friendly policies may thus eventually lead to more institutional adoption and legitimacy of digital assets.

More favorable and transparent policies initiated by Trump’s administration could thus boost more investment in the sector and subsequently bring more stability.

However, volatility in the crypto market continues, hence this is more speculative trading, especially as economic fundamentals remain under question.

The CPI data that is to come out will probably make the market feel even more dire since it will signal whether there is a certain level of inflation in the economy, therefore stressing Bitcoin as a speculative asset.

 Conclusion: The Road Ahead for Bitcoin, Dogecoin, and the Crypto Market

The post-election excitement in the crypto markets has begun entering the cautious phase, as investors wait for clarity on the economic policies that may come from Trump and the impending inflation data.

While a rocketing Bitcoin captured most of the attention due to record-breaking prices, the pullback seems to underscore those concerning uncertainties still ahead of the market.

Attached to the new DOGE agency, one cannot help but notice how Dogecoin is losing ground. This just brings to mind the warning that speculation about that kind of crypto market often presents rapid gains followed by swift corrections.

In the coming weeks, a watchful eye on U.S. inflation trends, along with all emerging policy details from the Trump administration, is likely to hold the attention of crypto investors.

Though encouraging enough on the part of the enthusiasts, the road toward a more stable and mainstream crypto market will require more concrete actions and supportive economic conditions.