On Monday (December 23), Bitcoin struggled to rebound at the $94,500 level, but technically flashed "three red candles" that scared the bulls. President-elect Donald Trump appointed Bo Hines as Executive Director of the President's Advisory Council on Digital Assets and nominated Stephen Miran as Chairman of the Council of Economic Advisers. MicroStrategy founder Saylor stated that Trump is serious about establishing a national Bitcoin strategic reserve and has met with the new government team multiple times.
According to The Block, Trump announced the appointment of Hines as Executive Director of his "President's Advisory Council on Digital Assets" to lead his crypto committee. Hines was a college football player who failed to win a congressional seat in 2022. He wrote, "In his new position, Hines will work with David Sacks, who has been appointed as the chairman of the U.S. Securities and Exchange Commission, to drive innovation and growth in the digital asset space while ensuring that industry leaders have the resources they need to succeed."
Trump's statement nominated economist and former advisor Stephen Miran as chairman of the Council of Economic Advisers, which will provide economic policy and strategic advice to the executive branch. He previously stated, "I believe financial deregulation will be an important component of that. I think cryptocurrency may play a significant role in innovation and ushering in another economic boom under the Trump administration."
With Trump continuing to select officials supportive of crypto and innovation for his cabinet, many in the crypto community celebrated Miran's nomination, seeing it as a positive development for the crypto industry.
Saylor released an asset framework on Twitter over the weekend, advocating for the establishment of a Bitcoin reserve that could create $16 trillion to $81 trillion in wealth for the U.S. Treasury, thereby offsetting national debt.
In an interview with CNBC, he stated that he believes Trump is serious about establishing a national Bitcoin reserve and that if one knows where the funds are flowing, one should buy for the future. "All funds from outside the U.S. and all outdated capital from the 20th century will flow into digital assets and the Bitcoin network. The most logical thing for the U.S. to do is to buy Bitcoin now and seize the future."
Saylor suggested that the government could sell its gold reserves or borrow a "small amount" of funds to buy 20-25% of the circulating Bitcoin, emphasizing that Bitcoin will grow 100 times and advising investors to buy early. He also urged the incoming Trump administration to take the lead in establishing a digital asset framework, clearly defining the roles of different entities and determining the responsibilities of participants.
Trump reported in November that he plans to establish a Cryptocurrency Advisory Committee to provide advice on digital asset policy, work with Congress to formulate cryptocurrency-related legislation, and assist in establishing a Bitcoin reserve, with several cryptocurrency companies, including Ripple, Kraken, and Circle, vying for a seat on the advisory committee.
Saylor may also have the opportunity to become a member of the Cryptocurrency Advisory Committee. In an interview with Bloomberg on December 19, he explicitly stated his willingness to serve as a cryptocurrency affairs advisor under the Trump administration.
When asked whether he had any contact with Trump or members of the Trump administration, Saylor stated, "I have met with many people in the incoming administration, but beyond that, I can't say more."
But when asked if he would be willing to participate in the Cryptocurrency Advisory Committee, Saylor explicitly responded that if Trump asked him to do so, he would be willing to provide advice on digital asset policy publicly or privately. "I am always willing to offer advice on constructive digital asset policy, whether in private or public settings. If I am invited to participate in some type of digital asset advisory committee, I might agree, yes," he said.
Bitcoin Technical Analysis
The Bitcoin daily chart saw its first consecutive three red candles since the first week of November, coinciding with the eve of Trump's victory in the U.S. election. Another similarity to the last observed instance of three or more red candles on the daily chart is that Bitcoin is retesting the 50-day EMA level.
Analysts say that Bitcoin's price has fallen more than 15% from its all-time high, and for this largest cryptocurrency, most of the downward trend may have ended.
As Bitcoin's price fell below $93,000 on December 20, independent cryptocurrency trader Captain Faibik stated that Bitcoin's adjustment is nearing an end. He emphasized that Bitcoin's current decline is due to a significant bearish divergence between its price and the relative strength index (RSI) over the past month. Such divergences typically lead to a decline of 8-10%, which is seen as a "healthy reset."
As shown, traders expect the price to bounce back from the $94,000 range.
In contrast, anonymous cryptocurrency trader Cold Blooded Shiller expects a larger pullback in Bitcoin based on similar divergence patterns. This trader compared Bitcoin's current price trend to the price trend in January 2024, stating that if a similar outcome occurs, Bitcoin's sell-off could drop to $85,000.
Meanwhile, futures market analyst Byzantine General emphasized that spot holders are continuously selling off. The analyst stated, "We are currently actually receiving perpetual option premiums because the spot sell-off is so significant that it has decoupled from the derivatives market."
In fact, CryptoQuant analyst Maartunn stated that this is the most significant sell-off activity on Coinbase since Bitcoin's price reached $66,000. The sell-off pressure is "relentless" as the Coinbase premium has dropped to a quarterly low.
