$BTC Trump's promises have led to renewed optimism for Bitcoin, but traders should watch key price levels for signs of a bull trap.
Bitcoin's rise is closely linked to a storm of regulatory change expectations and market conditions.
The $80,000 level is crucial for Bitcoin’s next move – failure to hold above it could signal a pullback.
Bitcoin made a strong comeback this quarter, and the broader cryptocurrency market followed suit, thanks to the largest cryptocurrency’s remarkable rise.
As we delve deeper into the factors driving this surge, one major influence stands out: Donald Trump's campaign promises.
His comments on Bitcoin and the cryptocurrency market have sparked optimism, increasing demand and pushing Bitcoin to new highs, even amid some negative market developments.
But now, with Trump’s victory, the market is quickly reacting to the clarity his policies provide. While a break above $80,000 is likely to be truly bullish for cryptocurrencies, there is also a chance that it could be a trap for bulls.
Therefore, monitoring price action near critical price levels remains essential for traders.
Trump's Promises Send Bitcoin Soaring
Trump made three major promises that contributed to the rise of the cryptocurrency market. First, he proposed making Bitcoin a reserve currency for the US Treasury.
Although the move may take some time, it signaled that the US government would not sell its large holdings of Bitcoin — a gesture that alone sent a powerful message to investors.
Second, his promise to introduce positive regulatory reforms for cryptocurrencies brought much-needed legitimacy to the sector.
A more favorable regulatory environment in the United States would set a global precedent, encouraging more investor interest.
Third, Trump’s commitment to fire SEC Chairman Gary Gensler upon taking office was a game changer.
The SEC’s tough stance on regulating altcoins has created uncertainty, and a shift toward a more crypto-friendly regulatory approach could add further upward momentum.
Bitcoin ETFs, Trump, and Fed Influence: The Perfect Storm for Growth
Looking at the broader cryptocurrency market, there are several factors that have played a role in Bitcoin's strong comeback.
The approval of Bitcoin ETFs, particularly the BlackRock (NYSE:BLK)-led spot ETF, has played a pivotal role in driving demand. The rise in Bitcoin prices has been linked to increased interest in these ETFs, which provide a safer and more regulated entry point for investors.
Adding to the hype, expectations that the Federal Reserve will move away from its tight monetary policy have given Bitcoin a boost.
While persistent inflation has slowed the Fed's moves, speculation about future rate cuts has fueled optimism, pushing more capital into riskier assets like Bitcoin.
However, the Trump effect was the final catalyst in this rally.
The combination of the Federal Reserve’s more accommodative policies and Trump’s economic policies — particularly his stance on tariffs — has created a volatile but potentially rewarding environment for Bitcoin investors.
Critical Levels to Watch for Bitcoin
Bitcoin’s recent surge has put it to a crucial test. The $80,000 level is now a major support area, thanks to its alignment with the 1.618 Fibonacci level.
This is the crucial price point that Bitcoin must hold if it wants to continue rising. A break below this level could signal a pullback.
Looking at the broader weekly chart, Bitcoin has been trending consistently higher since early 2023, and the recent surge has taken it to the middle line of this long-term ascending channel.
The $81,700 resistance level is key: if Bitcoin can break through it, the next target is $85,750, with $105,000 on the long-term horizon. On the downside, if Bitcoin faces selling pressure around the middle line, immediate support is $78,800, followed by $73,500.
As the market digests Trump’s policy promises and the Fed’s actions, the next few weeks will reveal whether Bitcoin can continue this upward momentum or face a potential correction.
Watch these levels – they may determine the next big move in Bitcoin.
Disclaimer: This article is written for informational purposes only. It is not intended to constitute a solicitation, offer, advice or recommendation to purchase any asset. All investments should be evaluated from multiple perspectives, and it is important to remember that any investment decision and the risks associated with it are the sole responsibility of the investor. In addition, no investment advisory services are being provided.