Bitcoin’s (BTC/USD) Volatility: Open Interest, ETF Flows in Response to Trump’s Remarks on Crypto

Bitcoin has been on a volatile journey, with its price fluctuating between $78,000 and $95,000, driven by recent comments from former President Trump regarding a strategic cryptocurrency reserve. In light of these remarks, Bitcoin experienced a surge of 11% to nearly $95,000 before settling around $86,000. This follows a recovery on Friday from lows of $78,197 to close at $84,321. Trump initially mentioned a reserve including XRP, Solana, and Cardano, later expanding it to include Bitcoin and Ether.

The market’s response to Trump’s comments has been mixed, with some viewing the proposed reserve skeptically. James Murphy, a lawyer specializing in crypto, expressed doubt about the feasibility of such a reserve, particularly through executive order. Even if Congress were to approve it, questions remain about how it would be funded and its potential impact on prices. The uncertainty surrounding Trump’s plan adds to broader concerns such as tariffs, which continue to influence market sentiment.

In terms of Bitcoin’s open interest, it currently sits at a six-month low, signaling potential price movements. Historically, low open interest levels have preceded price jumps, suggesting a positive outlook for Bitcoin. Additionally, Bitcoin’s funding rate has turned negative, a pattern observed before previous price surges. These indicators point towards favorable conditions for Bitcoin despite recent price fluctuations.

Looking at technical analysis, Bitcoin remains in a downtrend on the daily timeframe, with a death cross formation signaling further downside potential. On the two-hour chart, an inverse head and shoulders pattern played out as expected, leading to a rally to the $95,000 level. However, a subsequent pullback below key support levels indicates a shift in momentum favoring bears. Resistance levels at $86,567, $90,000, and $91,804, pose challenges for bulls looking to regain control.

In the realm of spot Bitcoin ETF flows, investments saw a significant increase of $94.3 million on the last day of February, following a period of withdrawals totaling $3.2 billion. The market will be closely watching ETF flows in the coming weeks to gauge investor sentiment post-Trump’s reserve comments.

Overall, Bitcoin’s recent price movements reflect a combination of factors, including geopolitical uncertainties, tariff concerns, and comments from influential figures like Trump. The market remains cautious amid these developments, with technical indicators and ETF flows providing additional insights into Bitcoin’s future trajectory. Investors will be monitoring key support and resistance levels to navigate the current market landscape.