- Bitcoin remains above $87,000 on Wednesday following a modest recovery this week.
- A recent report outlines that the markets are relatively stable and preparing for increased volatility as they process tariff announcements.
- Amberdata’s volatility cone analysis indicates convergence for Bitcoin, hinting at a phase of reduced volatility and market consolidation.
On Wednesday, Bitcoin (BTC) is trading above $87,000 after experiencing a slight recovery this week. A recent analysis details that the market environment is relatively stable and poised for volatility as it absorbs information regarding tariff changes. Furthermore, Amberdata’s volatility cone metric for Bitcoin shows signs of convergence, suggesting a period of lower volatility and market consolidation.
Bitcoin remains steady ahead of Trump’s tariff announcements
Bitcoin is positioned above $87,000 on Wednesday, partly influenced by a somewhat dovish stance from the Federal Reserve and indications that President Donald Trump might be considering a more lenient approach to tariffs. A report released on Tuesday mentions that the existing market conditions are calm but are likely to prepare for volatility as the announcement regarding tariffs approaches.
This analysis suggests that this calm market atmosphere may continue until April 2, when Trump is due to make a significant announcement about reciprocal tariffs. This event could potentially trigger renewed activity in both the cryptocurrency and broader financial markets, reminiscent of the sharp movements observed after earlier tariff-related developments involving Canada and Mexico earlier in the quarter.
If President Trump decides to soften his position, markets might experience an upward trend. Conversely, if his statements remain unclear, both long and short positions could face increased volatility. A strict approach could lead to a sharp decline similar to previous downturns seen in response to tariff news, as illustrated in the accompanying graph.
“In a scenario with back-and-forth statements, we could witness market conditions akin to those observed in February and early March when tariffs dominated discussions. While the U.S. economy remains robust, it is generally anticipated to slow due to tariffs—a risk that most economists have already factored in,” comments the analyst.
BTCUSD vs tariff headlines chart.
Amberdata’s Volatility Cone metric for Bitcoin reveals a convergence that suggests a period of reduced volatility and potential market consolidation. While this could indicate calmer conditions, it also implies that Bitcoin may be in a holding pattern, gearing up for a breakout when volatility returns.
-638785845690697857.png)
BTC Volatility Cone chart.
GameStop incorporates Bitcoin as a Treasury Reserve Asset
On Tuesday, GameStop (GME), the American video game retailer, announced an update to its investment policy to include Bitcoin as a treasury reserve asset. This move mirrors that of MicroStrategy, which currently holds 506,137 BTC acquired for $33.7 billion at an average price of $66,608 per Bitcoin, making it the largest corporate holder of this cryptocurrency.
This decision aligns with the growing trend of corporate Bitcoin adoption, fueled by a recent executive order from President Trump aimed at creating a strategic cryptocurrency reserve using government-held tokens. As of February 1, GME reported $4.7 billion in cash and cash equivalents.
Bo Hines, the Crypto Council Chief under Trump and head of the Presidential Council of Advisers for Digital Assets, expressed in a recent interview that he is open to the possibility of swapping Fort Knox gold reserves for Bitcoin, provided it does not negatively impact the government’s budget.
“If it’s budget neutral and doesn’t cost taxpayers, it’s essentially a swap,” Hines remarked.
He also highlighted the administration’s commitment to fostering innovation within various cryptocurrency ecosystems, noting that the four coins—Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA)—were emphasized due to their market capitalization and potential for inclusion in a separate reserve.
Bitcoin Price Forecast: BTC approaches a descending trendline; a breakout may indicate bullish momentum
Bitcoin’s price crossed above its 200-day Exponential Moving Average (EMA) at approximately $85,560 on Sunday and rose by 4.45% by Monday. However, it stabilized around $87,000 the following day. As of Wednesday, it continues trading just above this threshold, nearing a descending trendline formed by connecting multiple high points from mid-January.
If the 200-day holds as a level of support and BTC breaks above the descending trendline, it could extend its recovery to re-test the significant psychological barrier of $90,000. A successful close above this threshold may trigger another rally toward the March 2 peak of $95,000.
The Relative Strength Index (RSI) indicates a reading of 52, above the neutral mark of 50, suggesting mounting bullish momentum. Moreover, the Moving Average Convergence Divergence (MACD) indicator displayed a bullish crossover last week, signaling a buying opportunity and pointing to a potential bullish trend ahead. Additionally, rising green histogram levels above zero reflect strengthening upward momentum.
BTC/USDT daily chart
However, if Bitcoin encounters resistance at the descending trendline and closes below the 200-day EMA, it may trigger a decline to re-test the next support level around $78,258.
FAQs on Bitcoin, altcoins, and stablecoins
Bitcoin is the leading cryptocurrency by market capitalization, designed to function as a form of money. This digital currency is decentralized, meaning that it cannot be controlled by any individual, group, or entity, eliminating the need for intermediaries in financial transactions.
Altcoins refer to any cryptocurrency other than Bitcoin, though some consider Ethereum as a non-altcoin due to its significance in forking. If this is accepted, Litecoin would be the first altcoin, created as a fork of the Bitcoin protocol, thus presenting itself as an “improved” version.
Stablecoins are cryptocurrencies designed to maintain a stable price, typically backed by a reserve of the asset they represent. To achieve this, the value of each stablecoin is tied to a commodity or financial instrument, like the US Dollar (USD), with its supply managed by either an algorithm or market demand. The primary purpose of stablecoins is to provide a reliable entry and exit point for investors wishing to trade and invest in cryptocurrencies, as well as allowing them to store value amidst the volatility generally associated with cryptocurrencies.
Bitcoin dominance refers to the ratio of Bitcoin’s market capitalization in relation to the total market capitalization of all cryptocurrencies combined. This metric offers insight into Bitcoin’s popularity among investors. Generally, high Bitcoin dominance occurs prior to and during a bullish trend, when investors tend to favor a more stable and established cryptocurrency like Bitcoin. Conversely, a decline in Bitcoin dominance often indicates that investors are allocating their resources and/or profits into altcoins in search of greater returns, which can lead to significant rallies within those altcoin markets.