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Crypto Writer
Arslan Butt
Crypto Writer
Arslan Butt
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Bitcoin has struggled to regain its footing after slipping below the $89,000 mark. The digital asset saw an initial surge following former President Donald Trump’s announcement of a Strategic Bitcoin Reserve, only to retreat as investors processed the implications.
The market initially responded with enthusiasm, but concerns quickly emerged regarding the absence of immediate government purchases. Bitcoin dropped 3% to $87,590 before bottoming out at $84,690, highlighting a shift in sentiment.
While Trump’s initiative signals a move toward greater government involvement in digital assets, the market reaction suggests lingering uncertainty about the execution and long-term impact.
Trump’s ‘Digital Fort Knox’ Faces Skepticism
The executive order mandates the creation of a Bitcoin Strategic Reserve, composed solely of cryptocurrency seized in civil and criminal cases. White House crypto and AI czar David Sacks confirmed that the U.S. government currently holds 198,000 BTC worth approximately $17 billion, but reassured markets that no additional Bitcoin purchases will be made unless a budget-neutral strategy is developed.
Despite this clarification, traders remain cautious. The fact that the reserve is built from confiscated assets rather than fresh acquisitions raises questions about its long-term viability.
Furthermore, the administration has yet to provide a clear timeline or custodial framework, leaving analysts skeptical about whether this move will positively impact Bitcoin’s institutional adoption.
Market Volatility and Regulatory Concerns
Beyond Trump’s Bitcoin directive, broader crypto market volatility and regulatory uncertainty continue to weigh on investor confidence.
- JPMorgan analysts recently projected no major upside for Bitcoin in the short term, citing declining demand and economic instability.
- Bitcoin briefly spiked above $90,000 earlier this week but failed to maintain momentum, increasing the likelihood of a drop toward $70,000 if critical support levels are breached.
- Ethereum, Solana, and Cardano have also seen declines, with ETH down 2%, SOL down 3%, and ADA plunging 13%, reflecting broader market weakness.
Additionally, regulatory uncertainty remains a key risk. While Trump has signaled support for crypto, a lack of concrete regulatory frameworks continues to deter institutional investors. The upcoming White House Crypto Summit may provide clarity, but until then, Bitcoin is likely to remain volatile.
Bitcoin (BTC/USD) Technical Outlook
Bitcoin continues to consolidate within a symmetrical triangle pattern, indicating potential volatility ahead. The price is testing the 50-period EMA at $88,657, which serves as an interim dynamic support level.
A breakout above the $91,700 resistance zone could signal a bullish continuation toward $95,100. Conversely, a failure to hold above $86,900 may expose BTC to further downside pressure toward $84,750.
The 50-period EMA remains a key indicator, as BTC has struggled to hold above it following a sharp sell-off earlier this week. The support zone between $86,910 and $84,751 will be crucial in determining near-term sentiment.
Conclusion
Bitcoin’s price action suggests that traders remain wary despite the government’s apparent embrace of digital assets. The success of Trump’s Strategic Bitcoin Reserve will depend on its execution, regulatory clarity, and broader market dynamics.
Until those factors are addressed, Bitcoin remains at risk of further declines, with $91,740 as key resistance and $86,910 as critical support.
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