Bitcoin has lost 5.7% over the past 12 hours or so, dumping $4,000 in a fall from $70,000 to just below $66,000 during early Asian trading on Tuesday, where it found support.

However, it remains within a five-month rangebound channel that formed at the end of February.

Analysts have been searching for clues to explain the sudden dip in market sentiment following a seven-week high for the asset.

Political Polls or US Govt Moves?

On July 30, crypto trader and economist Alex Krüger observed that prices and euphoria were running high on Monday on the back of the Trump speech, with BTC hitting $70,000, “and then wham -5% in a straight line.”

He said it may have something to do with Democrat presidential candidate Kamala Harris performing well in the polls.

“If trying to rationalize the move, Id say it was a partial reflection of Kamala doing very well in the polls (polls, not betting markets). The Trump trade is long Bitcoin and long small caps. The Kamala trade is the opposite.”

According to The Hill, Trump’s lead in the polls had narrowed to just 1.5% on July 30 with 47.6% versus rival Harris on 46.1%.

Crypto trading can be brutal. Prices and euphoria were running high today into the US equities open, on the back of the Trump speech, $BTC ticked 70K, and then wham -5% in a straight line.

If trying to rationalize the move, Id say it was a partial reflection of Kamala doing… pic.twitter.com/GLalHo8jo0

Alex Krüger (@krugermacro) July 29, 2024

Another factor for the decline was the United States government moving around 29,800 BTC worth roughly $2 billion on July 29. This comes just days after Donald Trump said he wouldn’t sell any of the government’s Bitcoin stash if he were elected.

The U.S. government now holds 183,438 BTC worth around $12.5 billion, according to Arkham Intelligence.

Trump: We will not sell any siezed $BTC and allocate it to a strategic reserve.

Biden admin: pic.twitter.com/rqXePgKWtA

Hsaka (@HsakaTrades) July 29, 2024

In a post on X on July 30, crypto analyst “Inmortal” opined that the dip wasn’t necessarily a bad thing.

“But, the best thing that could happen to us is more consolidation. The bigger the consolidation, the bigger the expansion.”

Elsewhere on Crypto Markets

Total capitalization has declined around 4.4% in a fall to $2.48 trillion at the time of writing. However, it has also remained largely sideways for the past five months.

Ethereum fell from almost $3,400 to around $3,260 before recovering to reclaim $3,300 during early trading in Asia on Tuesday.

Other altcoins were hit harder as usual, with larger losses for Solana (SOL), Cardano (ADA), Avalanche (AVAX), and Near Protocol (NEAR).