Bitcoin and Dogecoin Retreat Amid Cooling Trump Rally

Bitcoin fell from record highs on Wednesday, as optimism over a Donald Trump presidency cooled. Attention shifted to upcoming U.S. inflation data for further insights.

Dogecoin's Decline

Major meme token Dogecoin also retreated after a significant increase, as traders locked in profits following Trump’s confirmation of Elon Musk and Vivek Ramaswamy to lead the Department of Government Efficiency (DOGE).

Bitcoin's Recent Performance

Bitcoin surged to nearly $90,000 this week thanks to a week-long rally after Trump’s election victory. However, investors are now focused on potential policies and their implications for the broader U.S. economy.

As of 00:31 ET (05:31 GMT), Bitcoin fell by 1.2% to $87,366.3.

Trump’s Promises and Economic Outlook

Trump has pledged to establish America as the crypto capital and suggested a national Bitcoin reserve. This implies a potentially friendlier regulatory environment for cryptocurrencies. Moreover, Trump's anticipated expansionary economic policies could impact long-term inflation and interest rates, with consumer price index data expected to confirm persistent inflation trends in October.

Dogecoin's Reaction to DOGE Agency

Dogecoin dropped 8.3% to $0.355270 after nearly doubling in value since Trump’s election. Initial gains were driven by Trump’s announcement regarding the DOGE oversight agency, aimed at reducing government bureaucracy. The relationship between Musk and DOGE continues to influence its price, although the agency's actual effectiveness remains unclear.

Altcoin Market Overview

Following Bitcoin's pullback, broader crypto markets saw declines. The second-largest cryptocurrency, Ether, dropped 5% to $3,163.50 after reaching a three-month high earlier this week. Other altcoins, including ADA, SOL, XRP, and MATIC, also faced significant declines ranging from 4.7% to 11.5%.