NAIROBI (CoinChapter.com) – Former United States President Donald Trump recently made headlines with his endorsement of Bitcoin, but the implications might not be as bullish as they appear. At the event, Trump pledged to establish a government Bitcoin reserve if re-elected. His remarks came under the slogan, “Make Bitcoin Great Again,” echoing his famous campaign slogan.
Financial bubbles are inherently political. In the 18th century, John Law’s ill-fated pumping of Mississippi Co. stock in France had state backing. Deregulation propelled Japan’s 1980s market boom.
More recently, Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, was accused of using over $100 million in misappropriated funds for lobbying. Such instances underscore how political actions can impact financial markets.
Political Motives Behind Trump’s Crypto Stance
Trump’s sudden support for Bitcoin raises questions about his motivations. Historically, he has shown skepticism toward cryptocurrencies. His current stance appears strategically timed to garner support from the crypto community.
Bitcoin retreated from a six-week high as traders shifted focus to speculation that the U.S. might sell seized tokens. Blockchain research firm Arkham reported the U.S. moved $2 billion worth of Bitcoin to a new digital wallet address.
Peter Schiff, a financial commentator, expressed skepticism about Trump’s intentions. Schiff argued that if Trump truly intended to use seized Bitcoin to start a U.S. “strategic” reserve, he would have kept his plan secret until in office. Schiff suggested the Biden administration would likely sell the Bitcoin before Trump could take action, undermining his plan.
Gabor Gurbacs, the founder of Points Ville, expressed skepticism by pointing out the challenges they faced when working with the Trump administration.
BTC Faces Resistance at $70K Amid Bearish Futures Sentiment
Bitcoin faced resistance at $70,000, triggering significant sell orders in the futures market. This caused the Taker Buy/Sell Ratio to drop below one, signaling bearish sentiment among traders and a potential short-term price decline.
As of July 31, Bitcoin trades at approximately $66,088.18 within a rising channel, with a trading volume of $27.66 billion.
However, the rejection at $70,000 and the RSI reading of 56 suggest a possible slowdown in buying momentum. The MACD indicator shows a bearish crossover, indicating a shift from bullish to bearish momentum.
Data from Cryptoquant reveals a decline in active Bitcoin addresses to approximately 556,000, indicating reduced market activity.
Additionally, Bitcoin exchange reserves have consistently decreased, now at 157.5 billion USD. The reduction in exchange reserves suggests a shift in market sentiment, with traders moving their Bitcoin holdings off exchanges, potentially indicating a long-term bullish outlook despite short-term bearish pressures.
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