Bitcoin, Dogecoin, Jasmy, XRP, HBAR, and other altcoins have all crashed this week. BTC dropped below $95,000, continuing the slow downtrend that started a few weeks ago after it surged to a record high of $109,200.
Dogecoin (DOGE), the biggest meme coin in crypto, has plunged to $0.2470, down by over 48% from the 2024 high. Similarly, JasmyCoin (JASMY) and Hedera Hashgraph (HBAR) have plummeted by over 50% from the highest levels last year. Ripple (XRP), one of the best-performing tokens, has slipped by 25%.
Why Bitcoin, DOGE, JASMY, XRP, HBAR and altcoins have crashed
- Buy the rumor, sell the news after Trump inauguration.
- Odds of Strategic Bitcoin Reserves approval are falling.
- Bitcoin is forming a bullish flag on weekly and megaphone on daily.
- Hawkish Federal Reserves and high inflation.
Buy the rumor, sell the news
The first major reason why Bitcoin and other altcoins have crashed this year is a concept known as buy the rumor, sell the news.This is the idea where investors buy assets ahead of a major event and then sell them when the news happened.
BTC and all other altcoins jumped sharply after Donald Trump won the general election in November. Most of them remained at an elevated level ahead of his inauguration and then continued falling after it happened.
Another contributing factor to this sell-off was Trump’s omission of any reference to cryptocurrency or Bitcoin in his inaugural address. Trump did not sign a crypto-focused executive order, irking many investors.
Strategic Bitcoin Reserves odds fall
Second, Bitcoin and altcoins like Dogecoin, Jasmy, XRP, and HBAR have retreated as odds that the US will create a Strategic Bitcoin Reserve (SBR) dropped. A majority of participants in a Polymarket poll believe that Trump will not approve these strategic reserves by March.
Such an approval would be beneficial for BTC as it would signal that more countries might do the same. That would happen at a time when Bitcoin supply is falling and mining difficulty is rising.
Bitcoin price forming bullish flag
The ongoing BTC price retreat is part of Bitcoin’s technical formation. As we wrote last week, Bitcoin is now forming a bullish flag pattern on the weekly chart. This pattern has a tall flag pole followed by a consolidation. This consolidation is happening now, which explains why Bitcoin has retreated from its highest level this year.
On the daily chart, Bitcoin’s retreat is because of the formation of a megaphone chart pattern as shown below. A megaphone is one of the most bullish chart patterns in the market. Bitcoin’s retreat has triggered more downtrend for most altcoins like Jasmy, Dogecoin, HBAR, and XRP price.
Therefore, by forming these bullish patterns, it is a sign that these other altcoins will bounce back later this year when Bitcoin breaks out.
Bitcoin price chart courtesy of TradingView
Federal Reserve and tariffs
BTC and other altcoins have also plunged because of Donald Trump’s decision to impose tariffs on some key countries like China, Mexico, and Canada. While he has paused tariffs on Mexico and China, there are odds that he will reimpose them next month.
Tariffs risk pushing US inflation much higher, which could permit the Federal Reserve to maintain a highly hawkish tone. Data released last week showed that the US inflation rose to 3.0%, while core CPI rose to 3.3%. Therefore, the Fed has hinted that it will maintain high interest rates for longer.
BTC and altcoins like Shiba Inu, Jasmy, HBAR, XRP, and Solana underperform when the Fed is hiking interest rates.
