Bitcoin’s remarkable bull run, which pushed it above $100,000, may be hitting the brakes. Analysts are flagging three red flags that could curb its momentum, including tightening liquidity, mixed signals from the Trump administration on a Bitcoin reserve, and a bearish technical pattern reappearing on the charts.
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Liquidity Crunch Threatens Crypto Rally
Global liquidity is shrinking. In fact, Arthur Hayes, Maelstrom’s Chief Investment Officer, pointed out on X that the U.S. Treasury’s cash balance has surged to $800 billion. Instead of injecting more dollars into the economy, the Treasury has tightened its grip following the recent debt ceiling showdown. Reduced liquidity often spells trouble for risk assets like Bitcoin, making market conditions less favorable for big price moves.
Trump Administration Drags Its Feet on Bitcoin Reserve
Crypto bulls were banking on Donald Trump’s promise to create a strategic Bitcoin reserve. That optimism helped BTC soar from $70,000 to over $100,000. However, the administration is now playing it safe, saying it will “evaluate” the feasibility of the reserve instead. Jim Bianco, president of Bianco Research, was blunt: “Evaluate/Study is what Washington does when they don’t want to do something.” BTC reacted swiftly, slipping to $96,000 overnight after Trump’s crypto czar confirmed the delay on CNBC.
Bearish RSI Pattern Resurfaces
On the technical front, Bitcoin’s 14-week Relative Strength Index (RSI) has formed a bearish divergence, echoing the setup from the 2021 market peak. Back then, a similar signal preceded a significant downturn. For now, Bitcoin’s price remains stuck between $90,000 and $100,000. Analysts warn that without renewed bullish momentum, BTC could correct below $90,000, triggering large liquidations across exchanges.
Whether Bitcoin breaks out or faces a deeper correction may hinge on global economic developments and U.S. policy shifts in the coming weeks. At the time of writing, Bitcoin is sitting at $97,829.99.
