Bitcoin price was down on Tuesday, losing 2.9% of its value to trade at $83,690 at the time of writing. The coin has resumed a downtrend, barely two days after US President Donald Trump announced plans to establish a strategic Federal Cryptocurency Reserve whose composition will include BTC, ETH, SOL, XRP and ADA. The crypto market has seen a significant shift in investor behaviour, with the level of risk aversion rising substantially.
Why Bitcoin Price Will Reverse
Despite Trump’s statement, many investors are not convinced that a strategic reserve established through an executive order assures Bitcoin of a safe future. Instead, many are focusing on the broader market, where concerns over a simmering global trade tariff war have injected a sour sentiment and weakened key fundamentals.
Analysts opine that Trump will need to take a bolder move and present his proposal to the Congress to legalise more robust spending on a strategic Federal crypto reserve. That is likely to face strong headwinds, as many legislators still hold a hardline stance against digital currencies.
Nonetheles, the upcoming inaugural White House Crypto Summit slated for March 7 could provide fuel for BTC price recovery. The summit is expected to provide a clearer roadmap for integration and adoption of cryptocurrencies in Federal financial system, clearing the path for increased institutional adoption.
Furthermore, 25 US States had already initiated legislations to approve the establishment of state-level strategic crypto reserves. That could gather a stronger momentum in the coming weeks, and potentially add propulsion to Bitcoin price.
With this setup currently taking shape, I expect Bitcoin to return to the upside in the coming week. However, near-term momentum will likely mirror happenings in equities markets.
Bitcoin Price Prediction
The momentum on Bitcoin price signals control by the sellers as per the RSI indicator. If resistance persists at $85,000, the first support is likely to come at $82,445. Breaking below that level will signal a stronger downward momentum which could take BTC price lower to test $79,975.
Conversely, breaking above $85,000 will favour the buyers to take over. In that case, the coin will likely head higher and encounter the first hurdle at $87,150. The downside narrative will be invalid if the BTCUSD pair breaks above that level. In addition, the resulting momentum could advance gains and test the second resistance at $89,260.
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