Bitcoin's Speculative Activity Plummets 50% as Trump's Crypto Reserve Plan Promises Market Manipulation

Data from Glassnode shows a significant drop in Bitcoin's speculative activity, with its "hot supply" plummeting by 50% in recent months.

Hot supply is a metric that measures the number of Bitcoin coins being actively traded within short timeframes. A contraction in this metric can signal a decrease in immediate market enthusiasm.

This aligns with the broader market trends, where Trump's strong push for blockchain innovation has been met with skepticism from some, who believe it might be a strategic move to manipulate the market.

Specifically, Trump's crypto reserve plan, which involves buying 200,000 BTC annually for five years, has drawn criticism, with many believing the announcement was a tactic to artificially inflate market sentiment and generate quick gains.

As the market experiences heightened volatility, opinions are divided. Some analysts predict further price corrections, while others are hopeful that increased institutional involvement might bring more stability to the market.

Crucially, Bitcoin's price is currently testing a crucial resistance range. While the optimism seen yesterday following the Federal Reserve's slowing of quantitative tightening (QT) is understandable, it's best to be cautious on shorter timeframes until a confirmed breakout above this resistance occurs.

This setup has many market participants closely following. While further bullish momentum is possible, it's worth noting that Bitcoin has been in a downtrend since early December, suggesting that maintaining a cautious approach is still the prudent move.

Many traders are also pivoting their strategies to include hedging positions to reduce potential risks while also continuing to accumulate BTC during these price swings.

For now, market sentiment remains quite fragile. A significant shift could occur with a decisive break above the resistance level, which could signal a potential reversal of the current trend.