Bitcoin Price Analysis: BTC Up Over 9% After Trump’s Crypto Reserve Announcement

Bitcoin (BTC) rallied on Sunday, surging from $85,199 to $94,727 after President Donald Trump named the cryptocurrencies included in the strategic crypto reserve. However, the price declined marginally after reaching this level and trading just above the $90,000 level. 

The flagship cryptocurrency had registered a substantial decline over the past week as adverse macroeconomic conditions, concerns about inflation, trade war, and the fallout from the Bybit hack adversely impacted investor sentiment, driving BTC below $80,000 to a low of $78,173 on Friday. 

Bitcoin (BTC) Registers Sharp Jump After Trump Announcement 

Bitcoin (BTC) rallied nearly 10% on Sunday after President Donald Trump said his planned US crypto reserve would include Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Solana (SOL), and Ripple (XRP). The announcement sent the crypto market surging as it reclaimed the $3 trillion level after an increase of almost 9%. Trump announced the news on Truth Social and directed his Presidential Working Group on Crypto to create a crypto strategic reserve holding BTC, ETH, SOL, XRP, and ADA. Despite Trump’s announcement, some market observers were unsure about the reserve holding BTC and ETH, given reports that Trump was considering an “America First” reserve. 

As a result of the announcement, BTC spiked to $94,500 before registering a marginal decline and moving to its current level. Federico Brokate, head of US business at 21Shares, believes the move indicates a shift towards greater government participation in the crypto space. 

“This move signals a shift toward active participation in the crypto economy by the U.S. government. It has the potential to accelerate institutional adoption, provide greater regulatory clarity, and strengthen the U.S.’s leadership in digital asset innovation.”

Meanwhile, James Butterfill, the Head of Research at CoinShares, said he was surprised the reserve included assets besides BTC. 

“Unlike bitcoin...these assets are more akin to tech investments. The announcement suggests a more patriotic stance toward the broader crypto technology space, with little regard for the fundamental qualities of these assets.”

Donald Trump signed an executive order in January referring to a national digital asset stockpile potentially derived from cryptocurrencies seized by the federal government through enforcement actions. However, Sunday’s announcement is the first time Trump referred to the stockpile as a strategic reserve. Rebecca Rettig, Chief Legal Officer at Jito Labs, stated in a prior interview, 

“From my understanding, a stockpile would mean that the government would hold onto the crypto they have accumulated from various cases whereas a reserve would ultimately be what the Treasury Department determines to purchase and hold.”

Trump’s Crypto Reserve Faces Congress Hurdle 

The crypto market surged after President Donald Trump announced a strategic crypto reserve. However, analysts warned the rally could be shortlived due to the lengthy approval process required to establish the reserve. Aurelie Barthere, principal research analyst at blockchain analytics firm Nansen, stated, 

“I think constituting a reserve by buying new tokens is a complex process that will need Congress’s vote so it will take time. I would be a bit wary of the sustainability of today’s move.”

Analysts are expecting an imminent market bottom after Bitcoin’s active addresses hit a three-month low on Sunday, hinting the market is at a crucial turning point. Analysts have also warned of short-term volatility, which could limit the upside as seen during the current session. Nicolai Sondergaard, research analyst at Nansen, stated, 

“As Aurelie mentions it likely will not be that easy, and I expect volatility in these tokens today especially (already seen in ADA nearly touching $1.17 and now sitting at $0.94). Regardless of how long these gains will last, it is momentarily positive for the market, but the question for the future will be if any of it will come to fruition. If not, it will likely be a negative news point for crypto.”

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) was firmly in bearish territory last weekend, falling below key support levels and moving averages. BTC started the previous week on a bearish note, dropping nearly 5% after failing to move past the 20-day SMA and settling at $91,622. Sellers retained control on Tuesday as BTC slipped below $90,000 to a low of $85,985. The price recovered from this level but could not reclaim $90,000 and settled at $88,654 after a drop of 3.24%. Bearish sentiment intensified on Wednesday as BTC dropped over 5% to $84,129. Despite the overwhelming selling pressure, BTC recovered on Thursday, rising to an intraday high of $87,045. However, it could not stay at this level and ultimately settled at $84,657, registering a marginal increase.

Source: TradingView

Bearish sentiment returned on Friday as BTC plunged below $80,000 and the 200-day SMA on its way to an intraday low of $78,173. However, buyers stepped in at this level, allowing BTC to reclaim $80,000 and settle at $84,362. Buyers returned to the market on Saturday as BTC rose over 2% and settled at $86,182. Markets rallied on Sunday after Donald Trump named cryptocurrencies in the strategic crypto reserve. As a result, BTC surged over 9% to surge past $90,000 and the 20-day SMA and settle at $94,322. However, the flagship cryptocurrency was back in the red during the ongoing session as buyers lost momentum. BTC is currently down over 4% and trading just above $90,000, slipping below the 20-day SMA.

Analysts have warned that Sunday’s rally could be short-lived, and current price action seems to favor negative predictions. The RSI was rejected from the neutral zone, and the MACD indicates a bearish bias. If sellers drive BTC below $90,000, it could decline towards $85,000.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.