Bitcoin Dips Below $85,000 Amidst Trump's Strategic Reserve Executive Order

Bitcoin's value has fallen beneath $85,000 during the early trading hours in Asia, influenced by U.S. President Donald Trump's recent executive order aimed at creating a Strategic Bitcoin Reserve.

This announcement, which seems designed to reinforce Bitcoin's significance in the U.S. economy, has instead escalated market volatility and resulted in liquidations amounting to over $250 million within the last day.

Market Response to Trump's Bitcoin Initiative

On Thursday, President Trump enacted the executive order to establish a Strategic Bitcoin Reserve. However, the market's reaction has been unexpectedly bearish, with traders clearly losing confidence. Many rushed to sell their holdings, prompting a substantial decline in Bitcoin's value.

As the Asian markets opened on Friday, Bitcoin plummeted to a low of $84,667. Although there has been a minor recovery, the leading cryptocurrency remains down approximately 5% over the past 24 hours.

This downturn has triggered an avalanche of liquidations in Bitcoin's futures market, tallying $261 million in the past day, as reported by Coinglass.

Analysis of on-chain data suggests that the majority of liquidations stem from long positions, indicating that traders who anticipated a price increase were caught off guard by the abrupt decline. Long liquidations now reach $115.60 million, marking the highest figure in three days.

Long liquidations occur when traders holding long positions are compelled to sell their assets at a reduced price, usually after the price falls beyond a specific threshold, forcing those betting on its rise to exit.

Moreover, Bitcoin's open interest has seen a downturn, emphasizing a decrease in trading activity following Trump's executive order. Currently standing at $50 billion, it has dropped 5% in the last 24 hours.

The open interest metric reflects the total number of outstanding derivative contracts that remain unclosed. A decline in open interest, alongside falling prices, hints that traders are opting to close positions rather than open new ones. This trend signals a waning market conviction among Bitcoin holders and raises the possibility of further price drops.

What’s Next for Bitcoin Ahead of the Crypto Summit?

The timing of Bitcoin's dip coincides with an upcoming crypto summit, which is generating significant anticipation among market participants. Should demand fail to recover and the downward trend persist, Bitcoin might revisit support established around $85,357.

If bulls cannot maintain this support level, Bitcoin could extend its decline toward $80,580 in the days to come. Conversely, should new market demand emerge, it may propel Bitcoin's price back above $90,000, potentially reaching $92,247.