US Government Establishes Bitcoin Reserve, Market Remains Unfazed as Bitcoin Hovers Around $89,000

The U.S. government has taken a significant step in the cryptocurrency realm by establishing a Strategic Bitcoin Reserve. This move, announced through an executive order signed by President Trump, aims to assimilate all Bitcoin seized in criminal forfeiture cases, amounting to approximately 200,000 BTC. The reserve is intended to serve as a store of value, similar to the gold stored at Fort Knox, with no plans to sell any of the Bitcoin held within it.

Despite the positive implications of this development, the market has shown a lackluster response. This can be attributed to the fact that the market was already aware of the government's holdings and the upcoming Crypto Summit. Additionally, the government has stated that it will not use taxpayer money to purchase additional Bitcoin, although there is a possibility of acquiring more through budget-neutral strategies or by selling other assets.

The market's indifference could also be due to the potential for manipulation by market makers, who might exploit the situation as a "sell the news" event. Unless new strategies are successfully implemented or tax exemptions are granted, the market could remain stagnant. The current price action of Bitcoin is contained within a triangle pattern, which could break out in either direction. A breakout to the upside might push the price above the major ascending trendline, while a downward break could lead to a descent to the $73,000 support level, potentially even reaching $69,000.

Looking at the daily time frame, recent price drops have been quickly bought up, forming long candle wicks that support the current triangle pattern. The price has managed to rise above the $89,000 level, which could now act as support. The Relative Strength Index (RSI) shows a long downtrend stretching back to mid-November 2024, and a breakout bounce could be imminent after the lowest drop for this indicator since August 2023.