Bitcoin Dips Below $95K as US Strategic Bitcoin Reserve Odds Decline
Bitcoin Price Struggles as Hopes for US Strategic Bitcoin Reserve Fade
Bitcoin’s price took a significant hit, dipping below $95,000 on Tuesday, continuing its downward trend that started four weeks ago when it peaked at a record high of $109,200. The latest dip follows a growing sense of uncertainty over the potential establishment of a U.S. Strategic Bitcoin Reserve (SBR), a plan that had gained attention earlier in the year but now faces declining odds.
Declining Odds for U.S. Strategic Bitcoin Reserve
Recent polls on Polymarket have shown a sharp decline in the probability of a Strategic Bitcoin Reserve being created in the U.S. The odds of this happening in the first 100 days of a potential Trump administration now sit at just 12%, down significantly from 40% in January. The uncertainty surrounding this proposal is weighing on Bitcoin’s market performance.
Another poll conducted by Kalshi showed a similar decline in the likelihood of the Texas Strategic Bitcoin Reserve Act being signed this year. The odds for this legislation have dropped from over 60% to just 38%, indicating diminishing momentum for Bitcoin reserves in the state. Legislators in other states, including Wisconsin, Arizona, Florida, Alabama, and Wyoming, have introduced bills aiming to establish similar reserves, but with probabilities remaining low, market sentiment is increasingly skeptical.
Trump Administration’s Role in Bitcoin Reserve Discussions
As Donald Trump and his administration continue to consider the possibility of a U.S. Strategic Bitcoin Reserve, venture capitalist David Sacks, serving as the administration’s crypto czar, confirmed that discussions are ongoing. One option being considered is the establishment of a strategic fund using Bitcoin seized by the government.
Currently, the U.S. government holds 198,109 BTC valued at approximately $18 billion, according to data from BitcoinTreasuries. These holdings could potentially serve as a foundation for the reserve, which could be supplemented by acquisitions through the newly formed sovereign wealth fund. The creation of a U.S. SBR would carry significant weight in the global crypto landscape, potentially encouraging other nations to follow suit.
For comparison, China holds 190,000 BTC, also worth around $18 billion, while the UK holds 61,245 BTC valued at $5.8 billion. Additional purchases could occur at a time when Bitcoin mining difficulty and demand are rising, while exchange balances continue to decline, suggesting that the strategic reserve concept remains a potential future driver of Bitcoin demand.
Bitcoin’s Price Pattern: Could a Surge Be on the Horizon?
Despite the current downward trend, Bitcoin’s price pattern may point to a potential rebound. The daily chart indicates that BTC has remained in a tight range over the past few months, staying above the 100-day moving average. More importantly, Bitcoin has formed a megaphone chart pattern, a technical indicator that is often seen as a bullish signal. This pattern consists of two diverging trendlines, typically followed by a strong breakout after the price tests the lower side of the channel.
This chart pattern, along with the cup-and-handle and bullish flag formations observed on the weekly chart, suggests that Bitcoin could see a significant upward movement in the near future. If the price retests the lower side of the range and holds, a strong rally could follow, bringing the price back into the upward trend seen earlier this year.
Conclusion: Bitcoin Faces Uncertainty Amid Strategic Reserve Doubts
Bitcoin’s recent price dip below $95,000 is a clear reflection of growing uncertainty regarding the U.S. Strategic Bitcoin Reserve and its potential impact on the market. As discussions on a national reserve continue to lose momentum, the market remains cautious. However, technical indicators still point to a potential surge in the coming weeks, with key chart patterns suggesting that Bitcoin may rebound if it maintains its position above the 100-day moving average.
For traders and investors, the next few weeks will be crucial in determining Bitcoin’s trajectory. Whether the decline continues or a breakout occurs, Bitcoin’s future remains dynamic and tied to both domestic policy decisions and global market movements.
