Bitcoin Price Plunges 4.7% to $88,000 – Market Reacts Disappointed to Trump's Strategic Bitcoin Reserve

Bitcoin Price Plunges 4.7% to $88,000 – Market Reacts Disappointed to Trump's Strategic Bitcoin Reserve

Bitcoin price falls by 4.7% despite strategic Bitcoin reserve

In the last few hours, Bitcoin price experienced a 4.7% decline and fell to $88,000. This downtrend came as a surprise as many investors had expected prices to rise, especially after President Donald Trump signed an executive order creating a strategic Bitcoin reserve. The market reaction to this news was negative as the lack of new purchases by the government did not meet investors' expectations.

The newly established Bitcoin reserve will be filled with approximately 200,000 BTC, worth approximately $17 billion, obtained from criminal seizures. This means the reserve will rely solely on existing stocks and there will be no additional government purchases, dampening investors' hopes of an increase in demand and price increases.

Hard setback on the markets

The disappointment over the lack of “new liquidity” weighed not only on Bitcoin, but also on the entire crypto market, which lost 5.8% in market capitalization. According to data from Coinglass, $403 million worth of long positions were liquidated in just a short period of time. This means that many investors became pessimistic about Bitcoin price action and quickly sold their positions. In the last 30 days, traders opened over $10.4 billion in short positions, while only $4.24 billion was invested in long positions.

Technical analysis: test of the 200-day moving average line

Bitcoin price is now testing support at $83,000, which is the 200-day Simple Moving Average (SMA). A break of this support could see the price drop to $72,000. At the same time, however, there is hope that stabilization could occur, as a setback at the 200-day SMA signals buying pressure.

The Relative Strength Index (RSI) is currently at 43.58, showing a slight bearish bias but approaching oversold territory. Still, the declining trading volume could indicate weaker selling pressure, which could lead to consolidation before a potential breakout.

Conclusion

The launch of the Bitcoin Strategic Reserve comes at a crucial moment as the cryptocurrency market heads toward a White House crypto summit that could potentially bring regulatory clarity and attract institutional investors. Nevertheless, the Bitcoin price is caught between hype and market reality, and traders are actively monitoring whether this development represents an obstacle or a turning point for Bitcoin.