Since the beginning of 2023, Bitcoin (BTC) has prepared a classic staircase, characterized by incremental price increases followed by periods of consolidation that set the stage for the next move higher.
Cryptocurrency’s ongoing price consolidation between $ 90,000 and $ 100,000 is the third of the wider bull race from $ 20,000. Consensus is that it will end in a bull break, just like those in mid -2024 and 2023 did.
However, the following three developments suggest second.
Tightening of USD -liquidity
If there is one thing that any asset class, not only crypto, typically dislikes, it is the tightening of Fiat liquidity, especially the global reserve currency, the US dollar (USD). To the dismay of BTC Bulls, the dollar liquidity is tightened due to several factors, such as Arthur Hayes, chief investment manager at Maelstrom, noted at X.
In particular, the USD Cash balance held in the Treasury General Account (TGA), the US government’s Fed, has risen from $ 623 billion to $ 800 billion in four weeks, according to data source Macromicro.
After the United States hit its self-imposed debt limit of $ 36 trillion last month, Markets hoped the Treasury would run down the TGA balance as part of extraordinary measures to keep government acting, inadvertently improved the liquidity of the economy and markets. That’s what the Treasury did during the previous debt ceiling edition at the beginning of 2023, which encourages increased risk taking on equity and crypto markets.
“We are looking at a scenario where Key Sources of Liquidity dries up or becomes more closely controlled. This can lead to a slowdown in economic activity, higher borrowing costs and potentially a more challenging environment for risk assets including crypto,” Andy Lian, thought manager and intermediate blockchain -S expert, said at X.
Trump -Administration to ‘evaluate’ strategic BTC -Reserve
Since President Donald Trump joined on January 20, he has actively followed through various campaign promises related to tariffs, illegal migrants and international affairs.
But there is a remarkable exception: establishing a strategic BTC reserve. It was a significant catalyst behind BTC’s increase from $ 70,000 to over $ 100,000.
The Trump administration seems to be more careful and chooses to “evaluate” the opportunity to create such a reserve. It is a disappointing shift for cryptoinvestors who expect quick action on this initiative, similar to Trump’s quick answer to other questions.
“Wait, Trump said he would do a $ BTC reserve, not promise to” evaluate it. “Evaluate/study is what Washington does when they don’t want to do anything,” said Jim Bianco, president and mackerel strategist at Bianco Research, LLC.
BTC fell from over $ 100,000 to $ 96,000 during the accommodation trade after Trump’s Crypto Czar told CNBC that a top agenda for his new task force is evaluating the possibility of a Bitcoin Reserve.
The performance of a 2021 -toopping pattern
Finally, those who look at technical charts to measure the next move may want to pull the 14-week relative strength index (RSI) on their screens.
That’s because the oscillator recently diverged Bearishly in a move that marked the 2021 top. A Bearish RSI Divergence contradicts the highest highest price and signalizes a slowdown in the bullish momentum.
RSI has produced a lower high in relation to its high December height, divergent bearishly from the continued price trend. It looks like the 2021 pattern.
The negative setup would be invalid if RSI crosses over the falling trendline representing the divergence, indicating a renewed bullish momentum.
