Crypto Outlook: US Crypto Strategic reserve in the works?

Since our last report, the bearish momentum which may have been guiding Bitcoin’s price appears to have significantly weakened. In this report, we aim to shed light on the possible factors aiding to the recent developments. Also in combination with a technical analysis of Bitcoin.

US Strategic Crypto Reserve

Over the weekend President Trump named cryptocurrencies which could make up the US Strategic reserve of digital assets. In particular, President Trump stated on a Truth Social post that “A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration. Which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA”.

Moreover, the President in a follow up post stated that the list also included ETH and BTC. According to some media outlets, this is the first time that the President has specified his support for a “reserve” versus a “stockpile”. This could thus may have aided the wider cryptocurrency market.

Nonetheless, the President’s decision to name cryptocurrencies for inclusion seems to have significantly aided the price of the mentioned coins. The US appears to be moving ahead with the formation of a crypto strategic reserve.

In conclusion, market participants have well received the announcement of a possible creation of a crypto strategic reserve, and if the administration proceeds with its plans, it may further aid the prices of the aforementioned cryptocurrencies.

Crypto Summit

The US is set to host the first cryptocurrency summit on the 7th of March. According to a press release from the White House, “Attendees will include prominent founders, CEOs, and investors from the crypto industry, as well as members of the President’s Working Group on Digital Asset.” The summit will be chaired by the Crypto ‘Czar’ David Sacks.

At this point, we don’t know exactly what will be discussed, and the true impact on the crypto markets may still be unseen.

The summit is historic, and if the discussions yield pro-crypto measures like a regulatory framework or increased collaboration, they could benefit the wider crypto markets.

However, should nothing major emerge from the summit, then it may not necessarily aid the crypto-markets. Nonetheless, the summit may benefit the prices of cryptocurrencies, particularly those mentioned in the strategic crypto reserve, as it may reaffirm the President’s commitment to the crypto industry, as seen during his election campaign.

Crypto Technical Analysis

BTC/USD Daily Chart

• Support: 90950 (S1), 78280(S2), 67000 (S3)
• Resistance: 95000 (R1), 109300(R2), 12000(R3)

BTC/USD appears to be moving in an upwards fashion based on the fundamentals we have discussed above. We cautiously opt for a bullish outlook for the coin’s price and supporting our case is the RSI indicator below chart which currently registers a figure near 50.

The figure itself may imply a neutral market sentiment. However, the figure has rapidly moved higher from 30, which may imply that the bears may no longer be in control of the coin’s price and may be on the verge of ceding control to the bulls.

Nonetheless, for our bullish outlook to continue we would require a clear break above the 95000 (R1) resistance line, with the next possible target for the bulls being the 109300 (R2) resistance level.

On the other hand, we would immediately switch our bullish outlook in favour of a bearish outlook in the event of a clear break below the recently formed 90950 (S1) support level, with the next possible target for the bears being the 78280 (S2) support line.

Lastly, for a sideways bias we would require the coin’s price to remain confined between the narrow sideways channel formed by the 90950 (S1) support level and the 95000 (R1) resistance line.

Disclaimer:
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

Risk Warning:

Crypto CFDs are an extremely high-risk, speculative investment and you may lose all your invested capital. Before trading, you need to ensure you fully understand the risks involved taking into consideration your level of experience and investment objectives. Seek independent advice, if necessary.