On Tuesday, BTCUSD retreated from yesterday’s all-time high of 109,581 as traders awaited cryptocurrency policy directives from President Donald Trump following his inauguration. Investors were hoping for cryptocurrency initiatives, including the possible creation of a national bitcoin reserve or a cryptocurrency advisory council. Instead, Trump focused on such issues as immigration, trade and energy.
The weekend brought unexpected news: the launch of Official Trump and Melania meme coins. The former reached a capitalization of $10 billion, and the trading volume of both coins exceeded $38 billion. However, these projects rather limited bitcoin’s growth by diverting capital to new assets.
The launch of meme coins is seen as a signal of the new administration’s positive attitude toward the cryptocurrency market.
Trump became an ardent supporter of the digital asset industry during the election campaign. He promised to make the US the crypto capital of the world and endorsed the idea of a strategic bitcoin stockpile, despite previously calling bitcoin a «scam.»
Since Trump won the US election in early November, the major digital currency has jumped about 50%. However, the question is whether the rally should take a breather if the president’s expected actions fail to excite speculators.
The technical analysis of the BTCUSD on the daily timeframe (D1) shows the formation of a bullish trend. At the same time, there are signs of a price correction. The Relative Strength Index indicator (period 14) shows a prolonged divergence, indicating the possibility of a change in direction towards the channel support.
The short term outlook for BTCUSD suggests a price decline with a target of 90,000.00. Partial profit taking is recommended at 97,500.00 and a stop loss could be set at 111,800.00.
As the bearish trend is short term, trading volume should not exceed 2% of the total balance to reduce risks.
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