Bitcoin Risks Losing the $90K-$110K Range as These 3 Developments Could Put the Brakes on the Next Bull Breakout

Bitcoin's (BTC) recent price consolidation between $90,000 and $100,000 is the third of the broader bull run from $20,000, with market consensus expecting a bull breakout. However, three recent developments could put the brakes on the next bull breakout and potentially lead to a loss of the $90K-$110K range.



Tightening USD liquidity is one factor that could impact Bitcoin's price stability within the given range. The USD cash balance held in the Treasury General Account (TGA) has increased from $623 billion to $800 billion in four weeks, indicating a reduction in liquidity. This trend could lead to a slowdown in economic activity, higher borrowing costs, and a more challenging environment for risk assets, including crypto. If this trend continues, it could result in a decrease in risk-taking by investors, potentially causing Bitcoin's price to drop below the $90K support level.

The Trump administration's decision to "evaluate" the feasibility of a strategic BTC reserve is another development that could affect Bitcoin's price trajectory. Crypto investors anticipating swift action on this initiative are likely to be disappointed, leading to a temporary sell-off and market uncertainty. However, if the administration ultimately decides to proceed with the establishment of a strategic BTC reserve, it could serve as a significant catalyst for Bitcoin's price, attracting more institutional investors and leading to a renewed rally within the given range.



The reappearance of a 2021 topping pattern in Bitcoin's Relative Strength Index (RSI) has raised concerns about the likelihood of a bull breakout. The RSI has recently diverged bearishly, with a lower high relative to its December high, similar to the pattern seen in 2021. This bearish divergence contradicts the higher high in prices, signaling a slowdown in bullish momentum. If the RSI crosses above the falling trendline, it would indicate a renewed bullish momentum and invalidate the negative setup. However, investors should consider alternative scenarios, such as a potential consolidation phase or a deeper correction, as the market may need to digest recent gains before resuming its uptrend.



In conclusion, the tightening of USD liquidity, the Trump administration's decision to evaluate the feasibility of a strategic BTC reserve, and the reappearance of a 2021 topping pattern in Bitcoin's RSI could put the brakes on the next bull breakout and potentially lead to a loss of the $90K-$110K range. Investors should closely monitor these developments and adjust their strategies accordingly.