Analysts caution that the market may be overestimating the potential impact of Trump's tariffs, suggesting that his negotiation tactics often lead to less severe actions.

Bitcoin recently experienced a significant drop, falling below $90,000 to $89,800 on January 13, 2025, after reaching an all-time high of $108,000 nearly a month prior.

This decline reflects a waning optimism that characterized the start of the year, as recent momentum has failed to attract buyers and instead has invited more sellers.

Investors are closely monitoring upcoming events, including Donald Trump's inauguration on January 20 and the Federal Reserve meeting at the end of January, which could influence market direction.

Traders are currently overlooking concerns regarding the Federal Reserve's hawkish stance ahead of the Consumer Price Index report expected later today.

Recent employment data indicating a significant increase in nonfarm payrolls suggests the U.S. economy may be overheating, complicating the Fed's approach to interest rates.

Concerns over potential monetary policy adjustments by the Federal Reserve, particularly regarding interest rate cuts, are exerting pressure on various asset classes.

Institutional sentiment remains mixed, as evidenced by notable outflows from Bitcoin ETFs, indicating caution among institutional investors.

Market sentiment has been further impacted by profit-taking and reduced institutional adoption news, alongside technical breaches of key support levels.

Key U.S. inflation data, including the Producer Price Index and Consumer Price Index, is scheduled for release and may significantly influence market trends.

Amid these fluctuations, there has been an increase in demand for stablecoin trading pairs, reflecting a shift from more volatile crypto assets to safer investments.

Overall, while initial optimism for a pro-crypto Congress and White House was high at the start of 2025, emerging macroeconomic concerns have begun to dampen investor sentiment.