Bitcoin analysts are signaling limited upside potential for the cryptocurrency following disappointment over US President Donald Trump’s Strategic Bitcoin Reserve plan, which did not involve direct government purchases of Bitcoin, contrary to some expectations.
Trump’s executive order, signed on March 7, outlined a plan to create a Bitcoin reserve using cryptocurrency forfeited in government criminal cases rather than actively acquiring Bitcoin (BTC) through market purchases, Cointelegraph reported.
Bitcoin plunged over 6% after the announcement, falling from $90,400 to $84,979, Cointelegraph Markets Pro data shows.
BTC/USD, 24-hour chart. Source: Cointelegraph
Bitcoin’s price action may lack any significant upside due to this initial investor disappointment, according to Bitfinex analysts, who told Cointelegraph:
“After initial disappointment with the announcement of the Strategic Bitcoin Reserve, we expect more rangebound trading as the US will not be making new purchases, and instead is simply introducing a plausible framework to hold seized crypto assets.”
Still, other analysts see the US Bitcoin reserve plan as the first “real step” for Bitcoin’s integration into the global financial system.
“The US has taken its first real step toward integrating Bitcoin into the fabric of global finance, acknowledging its role as a foundational asset for a more stable and sound monetary system,” Joe Burnett, head of market research at Unchained, told Cointelegraph.
Related: Bitcoin’s price movement ‘looks very manufactured’ — Samson Mow
Analysts debate long-term BTC impact
Despite the short-term investor disappointment, Trump’s Bitcoin reserve plans may prove to be a viable middle ground to start experimenting with Bitcoin as a national reserve asset.
This “softer approach” may be more viable and meet less mainstream resistance, according to Bitfinex Analysts, who added:
“This approach follows the possible realization in the White House that creating a fund to invest in cryptocurrencies might be met with a lot of resistance and hence the choice of a more viable and somewhat softer approach to adopting crypto assets.”
Related: Bitcoin struggles near $90K as US tariff fears spook ETF investors
Meanwhile, Bitcoin remains in a significant downtrend that resulted in a descending triangle on the four-hour chart, a bearish pattern that signals a market downtrend.
Source: Satoshi Flipper
To break this ongoing downtrend, Bitcoin will need to recapture the key $93,000 mark, wrote pseudonymous crypto analyst Satoshi Flipper in a March 7 X post.
Magazine: BTC above $150K is ‘speculative fever,’ SAB 121 canceled, and more: Hodlers Digest, Jan. 19 – 25
