The cryptocurrency market is bracing for potential volatility driven by political uncertainty surrounding former President Donald Trump, according to recent analyses. The primary concern stems from two scenarios: Trump's potential death or impeachment, which could trigger immediate market chaos.
Legal and Political Mechanics: If Trump were to die, the 25th Amendment would immediately make Vice President JD Vance the new president. In an impeachment scenario, removal from office requires a two-thirds Senate vote to convict. If successful, Vance would also assume the presidency. The probability of Trump being impeached by the end of 2026 is currently estimated at just 16% on prediction market Polymarket.
Market Impact of a Sudden Exit: Analysts predict that a sudden Trump exit would cause "blind panic" among increasingly irrational traders. The first 72 hours would likely feature long red candles, thin order books, and nonstop liquidations. Altcoins are expected to be hit hardest, with Bitcoin holding up only slightly better. A rush into stablecoins is possible, but could be undermined by fears that a new administration might target stablecoin infrastructure. Derivatives markets would see spikes in funding rates, basis trades could break, and cascading liquidations would crush leverage as liquidity evaporates.
The Role of Policy Continuity: The market's recovery would hinge on the actions of successor JD Vance. If he quickly affirms the continuation of Trump's pro-crypto policies, panic could subside faster. Vance is known to be pro-crypto, with federal financial disclosures showing he owns between $250,001 and $500,000 in Bitcoin via a Coinbase account. Trump's administration has been historically supportive, signing an executive order on January 23, 2025, to establish a White House crypto task force and approve a plan for a U.S. Bitcoin reserve. Under SEC Chair Paul Atkins, enforcement relaxed, including the dropping of a case against Binance, which the market interpreted as a regulatory green light.
Immediate Market Context: Concurrently, Bitcoin price action has entered a period of quiet consolidation around $91,000 as macro noise fades ahead of Trump's scheduled speech at the World Economic Forum in Davos. Cooling trade tensions have provided a more supportive environment, allowing the market to stabilize. Analyst Ted Pillows views the current setup as a reset in market structure, with $90,000 acting as a critical support level. If this level holds, the market is likely to see choppy, rotational price action rather than a sharp directional move, with a potential attempt to reclaim the $92,000 resistance level.
