The path of Bitcoin in recent years has been filled with ups and downs, often motivated by market speculation, regulatory developments and political movements. The last development surrounding Bitcoin concerns former President Donald Trump and the creation of a Bitcoin strategic reserve. This initiative has raised many questions-perhaps led to a rally for Bitcoin, or will investor skepticism continue to increase digital currency?
Trump’s executive order and Bitcoin reserve
In an important decision, former President Trump introduced a Bitcoin strategic reserve, marking a central moment in the relationship between the United States government and cryptocurrencies. This initiative stems from a recent decree which is considered a potential change towards greater institutional support for bitcoin in the United States
Despite the initial excitement, the Bitcoin price did not respond to the way many planned. After the declaration, the price of Bitcoin dropped by more than 4% within 24 hours, interrupting a previous 10% increase that the asset had seen the previous week. The absence of a significant price wave has left many people wondering if this initiative will have the impact that many hoped or if it will simply pass without changing the market price.
Trump’s influence on bitcoin: the decline of a trend
Trump’s influence on Bitcoin prices movements is not a new phenomenon. In fact, during the contribution of the American presidential election of 2024, Bitcoin experienced a significant increase in prices, going from $ 66,780 to $ 109,350, a gain of 63.75%. At the time, the market seemed to respond positively to Trump’s political success, increasing Bitcoin’s value.
However, this influence seems to decrease. Since the elections, Bitcoin has struggled to support the bullish momentum which initially followed Trump’s victory. A revealing moment came on January 23, when Trump declared the training of a working group aimed at developing a regulatory framework for Bitcoin. Instead of a rally, Bitcoin experienced a significant decrease of 27.08%, noting that investors’ confidence has decreed.
This drop suggests that the market can become more and more skeptical about the long -term Bitcoin prospects, even when political support is in place. If past models are an indication, Bitcoin could undergo additional drops, may be down 33% to around $ 58,000, according to how the feeling of investors evolves.
The role of investor skepticism
One of the main reasons for recent Bitcoin difficulties is growing skepticism among retail and institutional investors. Despite the training of the Bitcoin reserve, many investors seem to hesitate to buy. Data from the Premium Coinbase index, which follows the activity of retail investors, shows that the feeling of the market remains largely down, the index recording a negative 0.01. This figure generally indicates that retail investors are more inclined to sell than buy Bitcoin.
Institutional investors also seem cautious. According to Netflow data from Bitcoin Exchange Traded Funds (ETF), institutional actors have sold large parts of their Bitcoin farms. In the past 24 hours only, institutional investors have sold $ 134 million Bitcoin dollars – an unexpected decision given the anticipation that a strategic reserve could encourage purchase.
Since investors to profit generally consider the Bitcoin price of $ 88,200 as a potential purchase opportunity during key events, the decision to sell is an indication of wider skepticism on the market.
The bulls are always present, but the enthusiasm fades
Despite the overall lowered feeling, there are still market segments that remain slightly optimistic about Bitcoin. On the derivative market, for example, the financing rate – an indicator of whether traders pay bonuses for long or short positions – are 0.011. This suggests that there is still a certain optimism among buyers, who are ready to pay a premium in anticipation of price increases. However, the drop in the funding rate compared to the summit of the day before 0.0042 indicates that this optimism fades.
Likewise, investment funds in crypto like Grayscale Bitcoin Trust (GBTC) have shown some interest in the purchase of Bitcoin, although their activity remains moderate. The Fund Market Premium, a metric that follows the purchase activity among these funds, is currently 0.3, just above neutral and lowering areas. This suggests that even if there are purchases, it occurs at a cautious pace.
If the derivative market and the crypto investment funds are starting to look more down, the Bitcoin price could face additional decreases in its current position.
What should you do with an increase in prices?
For Bitcoin to be able to experience a significant increase in prices, the broader feeling of the market should move in favor of cryptocurrency. The current reluctance of retail and institutional sales investors to buy Bitcoin – despite the training of a strategic reserve – indicates that more than just political support is necessary.
A sustained rally could be motivated by factors such as greater clarity on the regulatory framework of Bitcoin, increased institutional adoption or an improvement in economic conditions which make bitcoin more attractive as an alternative ratio. However, until these factors materialize, the price of bitcoin will remain likely to stay in a state of flow, with continuous uncertainty about its future direction.
Conclusion: a period of uncertainty
Although Trump’s Bitcoin reserve is certainly important development, its ability to drive a sustainable rally for Bitcoin is far from certain. Skepticism in the process of retail and institutional investors poses a major challenge to the short -term bitcoin prospects. Until there are clear signs of stronger confidence on the market, Bitcoin can continue to cope with downward pressure, its future price movements remaining uncertain.
While Bitcoin continues to struggle with investors’ skepticism and market volatility, will the question remain: will this strategic reserve be the turning point whose market needs, or be another brief moment in the Russian mountains of Bitcoin? Only time will tell us.
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