Key Points
- Bitcoin’s price has dropped by 4.05% despite the executive order to establish a strategic BTC reserve.
- U.S. retail and institutional investors’ skepticism has led to a decline in Bitcoin’s price.
Despite the recent executive order expected to boost Bitcoin’s price, the cryptocurrency has witnessed a 4.05% drop. This decline interrupts the previous week’s 10% surge in Bitcoin’s performance.
Decreasing Influence of Trump on Bitcoin
President Donald Trump’s impact on Bitcoin’s price seems to be fading. Following his 2024 U.S. presidential election victory, Bitcoin surged from $66,780 to $109,350, marking a 63.75% increase. However, Bitcoin has since struggled to provide additional rally opportunities, indicating a shift in market dynamics and sentiment.
After the announcement of a Presidential Working Group to create a Bitcoin regulatory framework, the asset fell 27.08%. This decline is unusual and reflects growing investor skepticism, possibly keeping many investors on the sidelines.
Reasons for Bitcoin’s Decline
The recent drop in Bitcoin’s price can be attributed to skepticism among U.S. retail and institutional investors. The Coinbase Premium Index confirms that retail investors are selling rather than buying.
Similarly, Bitcoin Exchange-Traded Fund (ETF) netflow data shows that institutional investors are also selling in the current market environment. In the last day, the exchange netflow turned negative as institutional holders sold $134 million worth of Bitcoin.
Despite some market segments remaining bullish, the momentum appears weak. In the derivatives market, the Funding Rate indicates a slightly bullish bias, but enthusiasm seems to be waning. The Fund Market Premium also shows that crypto investment funds like GBTC are buying, but at a slow pace.
If the derivatives market and crypto investment funds turn bearish, Bitcoin’s price could experience further declines from its current level.
