- Bitcoin’s hot supply has shrunk by 50% in recent months, signaling reduced trading activity.
- Trump’s alleged market manipulation and crypto reserve plans raise controversy.
- Traders brace for volatility amid speculation on government influence.
Data from Glassnode shows a significant drop in Bitcoin’s speculative activity, with its “hot supply” plummeting by 50% in recent months. This sharp decline in short-term BTC trading has many market observers wondering if President Trump’s recent moves in the crypto space could be the reason.
“Hot supply” is a key metric that tracks the number of Bitcoin coins being actively traded within short timeframes. A noticeable contraction in this metric often signals a decrease in immediate market enthusiasm, particularly when external factors create uncertainty.
Related: Arizona House Committee Greenlights Bitcoin Reserve Bill
Could Trump’s Crypto Actions Be Behind the Cooling Speculation?
While some crypto enthusiasts are applauding Trump’s increasingly favorable stance towards digital assets, others are raising concerns about potential market manipulation.
Crypto analyst Atlas called out the president’s crypto team for engaging in a large-scale pump-and-dump scheme .
The allegation is that Trump’s inner circle took long positions, hyped up the market, and then quickly sold their holdings for a profit. This accusation has gained traction since Trump announced his plans for a U.S. Crypto Reserve, which further amplified speculative behavior.
Trump’s Crypto Reserve Plan for Market Manipulation
While Trump’s strong push for blockchain innovation sounds promising to some, skeptics argue it might just be a strategic play to manipulate the market.
The crypto reserve’s ambitious goal of buying 200,000 BTC annually for five years has drawn sharp criticism, with many believing the announcement was a tactic to artificially inflate market sentiment and generate quick gains.
As market volatility spikes, opinions are divided. Some analysts predict further price corrections, while others are hopeful that increased institutional involvement might bring more stability to the market.
Bitcoin’s Resistance Test: Bullish Hopes Meet Cautious Reality
Currently, Bitcoin’s price is testing a crucial resistance range. While the optimism seen yesterday following the Federal Reserve’s slowing of quantitative tightening (QT) is understandable, it’s wise to be cautious on shorter timeframes until a confirmed breakout above this resistance occurs.
Source: Luca
Related: Ripple CTO David Schwartz Explains Why Bitcoin Lost Its Transactional Edge
Market participants are closely watching this setup. Although further bullish momentum is possible, Bitcoin’s downtrend since early December suggests that maintaining a cautious approach is still the prudent move. Many traders are hedging their positions to reduce potential risks while also continuing to accumulate BTC during these price swings.
For now, market sentiment remains fragile. A significant shift with a decisive break above the resistance level could signal a potential reversal of the current trend. Until that happens, investors are likely to remain cautious, especially short-term traders navigating Bitcoin’s volatile landscape.
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