Bitcoin Holds Above $118K Despite Treasury Secretary’s Mixed Signals on Strategic Reserve Purchases
Bitcoin (BTC) is still above $118,000 at the time of writing, although it has dropped about 3.7% in the last 24 hours after a time of
Quick overview
- Bitcoin is currently priced above $118,000 but has dropped about 3.7% in the last 24 hours due to regulatory uncertainty.
- US Treasury Secretary Scott Bessent clarified that the government plans to acquire Bitcoin for the Strategic Reserve using confiscated assets, which initially caused market confusion.
- Despite recent volatility, institutional demand for Bitcoin remains strong, with significant holdings reported by companies like SpaceX and ongoing inflows into Bitcoin ETFs.
- Technical analysis suggests Bitcoin may consolidate between $118,000 and $122,000 before determining its next major price movement.
Bitcoin BTC/USD is still above $118,000 at the time of writing, although it has dropped about 3.7% in the last 24 hours after a time of regulatory uncertainty. After US Treasury Secretary Scott Bessent made inconsistent statements about the government’s plans for the Strategic Bitcoin Reserve, the world’s largest cryptocurrency saw a lot of price movement.
Treasury Department Clarifies Bitcoin Purchase Strategy After Market Confusion
The turmoil started when some thought that Bessent’s first comments to FOX Business meant that the Treasury was giving up on plans to buy Bitcoin for the Strategic Reserve. “We’re not going to buy that, but we are going to use confiscated assets and keep building that up,” Bessent said. This caused the market to react right once, and Bitcoin’s market cap dropped by around $55 billion in 40 minutes.
CoinGecko data shows that Bitcoin dropped from $121,073 to $118,886 after these comments. Bessent promptly made his views clear on X (previously Twitter), saying, “Treasury is committed to exploring budget-neutral pathways to acquire more Bitcoin to expand the reserve, and to execute on the President’s promise to make the United States the ‘Bitcoin superpower of the world.'”
The Treasury Secretary said that Bitcoin that the federal government takes away will be the basis of the reserve. He also said that the US would “stop selling” its current Bitcoin holdings, which is a big deal. Bessent says that the US’s current Bitcoin reserves are worth between $15 and $20 billion. BitBo’s Bitcoin Treasuries dashboard says that the US has 198,012 Bitcoin worth $23.5 billion.
BTC/USD Technical Analysis: Mixed Signals Despite Recent All-Time High
From a technical point of view, Bitcoin’s recent performance is hard to understand. On Thursday, the cryptocurrency hit a new all-time high of $124,474 before falling down to where it is now. Important technical indications show:
Bullish Indicators
- The MACD histogram hit its most optimistic level since July 2025.
- The RSI14 at 68.5 shows that there is still room before the market is overbought.
- Fibonacci forecasts say that the next big resistance level is around $126,870.
- The 7-day SMA support at $118,892 is still there.
Neutral to Bearish Signals
- The BTC futures annualized premium is 9%, which is in the neutral area.
- Options for Bitcoin A delta skew of 3% means that the risk outlook is balanced.
- Not being able to stay beyond the psychological level of $120,000
The way the futures market reacted shows that traders stayed rather calm even though the correction was big. The BTC futures premium has stayed in the 5% to 10% neutral area, which means that the recent record high wasn’t caused by too much leverage.
Institutional Demand and Exchange Reserve Dynamics
Even though the price changes a lot, more and more institutions are using it. Companies are still accumulating a lot of money, with SpaceX holding 8,285 BTC worth more than $1 billion and companies like Thumzup Media recently announcing $50 million in crypto treasury allocations.
But exchange data shows some worrying signs. Binance Bitcoin reserves have jumped to 579,000 BTC, which is a big jump from the lows in July. This 25,000–30,000 BTC rise (5–6%) could mean that market makers are either taking profits or adding to their liquidity pools.
Bitcoin ETFs that are traded on US exchanges are still doing well, with net weekly inflows of more than $1 billion. This brings the total value of all ETFs to $154 billion and shows that institutional demand is still robust.
Macroeconomic Headwinds Create Uncertainty
The economy as a whole sends mixed signals about where Bitcoin is going. The US Producer Price Index data, which showed 3.3% annual inflation, was higher than predicted, which lowered expectations for big rate reduction from the Federal Reserve. The CME FedWatch tool now says there’s a 61% chance that rates will drop to 3.75% or lower by January 2026. A week ago, that number was 67%.
Even said, US stocks bounced back from losses caused by inflation, which suggests that Bitcoin’s correction may be more related to the cryptocurrency market than the economy as a whole. The S&P 500’s strength shows that people are still willing to take risks.
Bitcoin Price Prediction: Consolidation Before Potential Breakout
Bitcoin looks like it will stay in the $118,000-$122,000 region for a while longer based on both technical and fundamental analysis. After that, it will decide what its next big move will be. There are a number of possible outcomes:
- Bull Case ($130,000–$150,000): If the Treasury keeps buying Bitcoin and institutional demand picks up, Bitcoin might break past the $126,870 Fibonacci resistance and possibly reach $150,000, as analysts like Vikram Subburaj of Giottus Crypto Platform have said.
- Base Case ($115,000–$125,000): The markets will keep trading in a range as they get used to the new rules and the state of the economy. The area between $118,000 and $120,000 is probably a new support level.
- Bear Case ($110,000–$115,000): If exchange reserves keep selling and the economy keeps getting worse, Bitcoin might drop below the $110,000 support level. However, derivatives data shows that there isn’t much interest in going lower.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save