Bitcoin trades above $90K on expectations of a US crypto reserve

Bitcoin traded sideways on Thursday, remaining above the key $90,000 level, ahead of the first ever crypto summit in the White House on Friday. If BTC price declines, support can be found at $78,000, while resistance may be encountered at $95,000. 

Ethereum price also remained steady on Thursday, hovering close to the $2,220 level. If Ethereum price declines, it may encounter support near $2,000, while if it increases, it may encounter resistance near $2,600.

Bitcoin price registered a new all-time high of $109,880 in January but has since been under pressure by increased risk aversion sentiment. 

The US government is expected to adopt a pro-crypto regulatory and fiscal policy, boosting cryptocurrency prices. More importantly, US President Donald Trump has often mentioned plans of building a Bitcoin strategic reserve. Over the weekend, Trump reaffirmed on his social media that he plans to establish a national cryptocurrency reserve. Trump announced that he will establish a national crypto reserve composed of multiple cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Cardano (ADA), and Solana (SOL). Trump’s announcement created a crypto market hype that boosted most major cryptocurrencies and especially those mentioned specifically in Trump’s announcement. On Monday, however, the hype created over Trump’s announcement faded and Bitcoin and other major cryptocurrencies plummeted on profit taking. 

Trump announced earlier this week that he will be hosting the first White House crypto summit in history. The event is scheduled to take place on Friday and will be attended by major members of the crypto industry, including prominent founders, CEOs and investors. Bitcoin price rallied after Trump’s announcement on investors’ expectations of future adoption as a mainstream currency. Rumors that the White House crypto summit will mark the launch of the US cryptocurrency strategic reserve, are boosting crypto markets. 

Most major cryptocurrencies are under pressure on concerns that US President Donald Trump’s trade policies may start global trading wars. Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries. The uncertainty over Trump’s future policies and trade tariffs is generating a risk aversion sentiment, putting pressure on crypto markets. 

Trump’s tariff plans change rapidly, causing confusion and volatility in markets. Trump’s plans of imposing 25% tariffs on Canada and Mexico had been postponed for a month after both countries agreed to tighten border activities. On Monday, however, Trump stated that he intends to go ahead with imposing tariffs on his neighboring countries and the tariffs against Canada and Mexico took effect on Tuesday. Trump has also imposed additional 10% tariffs on China starting on Tuesday, bringing Chinese duties to a total of 20%. 

Trump’s tariffs may spark global trade wars and are causing turmoil in markets. Trump’s tariffs are likely to raise global inflation and lower economic outlook, thus promoting a risk aversion sentiment that puts pressure on crypto markets. The Canadian government has announced that they would implement 25% retaliatory tariffs on US imports starting on Tuesday. Trump escalated matters further, threatening Canada with increased reciprocal tariffs. China retaliated to the increased US duties by announcing 10%-15% tariffs on certain US imports, such as farm products, starting from March 10. The saga continued on Thursday as Trump took back the tariffs that he had announced earlier this week on Canada and Mexico. The US President announced late on Thursday that the tariffs would be postponed until April 2, causing further upheaval in markets.

US President Donald Trump’s plans to broker a peace treaty between Russia and Ukraine have so far been fruitless. Last week, Trump had a heated meeting with Ukrainian President Volodymyr Zelenskyy in the White House. The clash confirmed that a peace treaty is not yet on the horizon, putting pressure on risk assets. On Sunday, however, European leaders gathered to discuss the situation in Ukraine. British Prime Minister Keir Starmer stated that European leaders have agreed to draft a peace proposal between Russia and Ukraine and send it to Washington.

Cryptocurrency prices are also affected by central banks’ interest rates. High interest rates stifle economic growth, putting pressure on crypto markets. The US Federal Reserve held interest rates steady at its January meeting, after delivering three consecutive rate cuts in 2024. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%.

BTC/USD 1h Chart

ETH/USD 1h Chart

TRADE CRYPTO

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article: