Trump's "Bitcoin Reserve" Plan Fails to Halt Bitcoin's Decline: Experts Predict Price Could Fall to $70,000

Trump's "Bitcoin Reserve" Plan Fails to Halt Bitcoin's Decline: Experts Predict Price Could Fall to $70,000Despite former US President Trump's vocal support for cryptocurrency and recent announcement of a US strategic crypto reserve, Bitcoin's price has continued its downward trajectory, falling below $85,000. This has sparked market anxieties, with investors closely watching for a price floor

Trump's "Bitcoin Reserve" Plan Fails to Halt Bitcoin's Decline: Experts Predict Price Could Fall to $70,000

Despite former US President Trump's vocal support for cryptocurrency and recent announcement of a US strategic crypto reserve, Bitcoin's price has continued its downward trajectory, falling below $85,000. This has sparked market anxieties, with investors closely watching for a price floor. Cryptocurrency experts offer varying predictions, suggesting further dips are possible, but maintaining a long-term bullish outlook.

BitMEX co-founder Arthur Hayes predicts a worst-case scenario of Bitcoin retracing to its previous bull cycle high of $70,000. While acknowledging the ongoing bull market, he remains uncertain about whether Bitcoin will reach this level. He points to the declining US Treasury General Account balance, equivalent to liquidity injection, which could potentially support Bitcoin prices and create an opportunity for another upward surge from the $80,000 low.

However, Hayes also highlights potential risk factors. "If the S&P 500 or Nasdaq 100 corrects 20% to 30% from its all-time high, and there's a large financial institution facing insolvency risk, we could see a synchronized global market crash. That means all risk assets will suffer together, and Bitcoin could fall below $80,000 again, potentially even to $70,000." He believes that a final major financial shake-up in global markets, particularly the US, will lead to a Bitcoin price of $1,000,000 or higher, at which point they would cautiously buy the dip without leverage.

Gracy Chen, Managing Director of cryptocurrency exchange Bitget, echoes similar concerns, suggesting a potential Bitcoin price drop to the $72,000-$80,000 range. She notes growing institutional interest in digital assets, but major buyers, including sovereign wealth funds and family offices, remain hesitant, waiting for a better entry point.

Chen views Trump's Bitcoin reserve plan as more of a promise than concrete action. Without tangible steps, large buyers remain cautious before committing significant capital. "I've spoken to many family offices and financial investors. They're very cautious today. They see $100,000 as a psychological price point that needs to be repeatedly tested, because just a year ago Bitcoin was trading at $30,000-$40,000 before the ETF approvals," she explains.

She further points out that many ETF buyers who entered around $40,000-$50,000 are taking profits after a 100% gain, adding to the selling pressure. "For traditional financial investors, a 100% return in a year is impressive. So naturally, some are taking profits, and that creates selling pressure," Chen says.

While Chen also holds a long-term bullish view, she anticipates short-term Bitcoin price fluctuation between $90,000 and $110,000, potentially dipping to a low of $80,000. "To be precise, the Bitcoin price range is between $72,000 and $80,000," she adds.

Chen's perspective aligns with Hayes' prediction of further price declines, both emphasizing the influence of macroeconomic factors on the cryptocurrency market and the pressure from cautious institutional investors.

Trump's announcement of a US strategic crypto reserve initially spurred a brief Bitcoin price surge to $93,000. However, this rally proved unsustainable, with prices quickly retreating and continuing their downward trend. This highlights the market's vigilance towards the gap between policy promises and actual implementation, indicating that policy-driven optimism lacking tangible action struggles to effectively boost market confidence.

Currently, the market focuses on macroeconomic shifts, including the Federal Reserve's monetary policy, inflationary pressures, and global geopolitical risks. The uncertainty surrounding these factors impacts Bitcoin's price trajectory.

Hayes and Chen's predictions, while pointing to potential further Bitcoin price drops, both express long-term bullish optimism. They believe that once global markets stabilize, Bitcoin will enter a new upward cycle, potentially exceeding $1,000,000. However, they emphasize the importance of risk management, advising investors to invest cautiously, avoiding leverage to mitigate potential losses.

While expert predictions on Bitcoin's future price diverge, they unanimously agree that macroeconomic conditions, institutional investor behavior, and policy uncertainty will continue to significantly influence Bitcoin's price movement. Investors need to closely monitor these factors and adapt their investment strategies accordingly. Increased market volatility necessitates caution, rational investment, and avoidance of blind following of trends. The current complex and volatile macroeconomic environment renders any prediction uncertain; investors must remain vigilant and make investment decisions based on their own risk tolerance. Continuously monitoring market dynamics and adjusting investment strategies is crucial for achieving stable returns in the cryptocurrency market.