Bitcoin Holds Above $104K as Czech Bank Weighs 5% Reserve Allocation Amid Trump Tariff Tensions

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MARKETS TREND

Bitcoin continues to demonstrate resilience in early 2025, trading above $104,000 despite recent market turbulence and geopolitical tensions.

Bitcoin Holds Above $104K as Czech Bank Weighs 5% Reserve Allocation Amid Trump Tariff Tensions

The leading cryptocurrency BTC/USD has shown remarkable strength, gaining 13.5% in January alone, though it faces several key challenges before potentially reaching new all-time highs.

Trump Tariff Announcement Diminishes BTC Rally

Following former President Trump’s announcement of intentions to impose 25% tariffs on Mexico and Canada beginning February 1, the bitcoin has dropped from $106,000. The announcement touched off a wider fall in risk assets; Bitcoin settled at roughly $104,800 as markets processed the ramifications of possible trade conflict.

Czech National Bank Considers Adding Bitcoin to Strategic Reserves

Institutional interest in Bitcoin keeps rising even with the little setback. As part of its international reserve management plan, the Czech National Bank (CNB) has authorized a proposal to assess Bitcoin investments, thereby possibly assigning up to 5% of its €140 billion reserves to the bitcoin. Furthermore, the $500 million invested in MicroStrategy shares by Norway’s central bank indicates mounting institutional tolerance with Bitcoin presence.

Bitcoin ETF Inflows Show Strong Institutional Investor Demand

With assets under control of over $124 billion, Bitcoin ETFs clearly show great institutional demand. But this change has coincided with an odd trend: Glassnode data shows that retail investor activity dropped by about 48% since November 2024. Analysts blame this in part on “unit bias,” whereby retail investors see Bitcoin’s six-figure price as psychologically unacceptable even though they could buy tiny amounts.

Three Key Factors Limiting New Highs

Market analysts identify three main factors currently capping Bitcoin’s price:

  • Global economic uncertainty, with both US and eurozone showing signs of slowdown
  • Recent volatility in the AI sector, which has reduced overall risk appetite
  • Gradual pace of traditional banking adoption despite improving regulatory environment

BTCFi and Bitcoin Mining Developments

With DeFi applications being valued at over $7.2 billion overall, the Bitcoin environment is changing. Companies like Elastos are extending Bitcoin’s DeFi capabilities, lately raising $20 million in investment to create fresh protocols. Grayscale has meantime created a Bitcoin Miners ETF (MNRS), giving investors access to the mining industry free from direct bitcoin ownership.

BTC/USD Technical Analysis

BTC/USD

 

Technical analysts are still positive about Bitcoin’s near-term future; some point out positive market structure and momentum signals implying space for expansion. With the next significant resistance mark near $108,000, the cryptocurrency has kept support around $104,000.

While Bitcoin faces some headwinds, the institutional adoption trajectory and improving regulatory environment suggest continued strength in the market. The cryptocurrency’s resilience in the face of macro uncertainties and its ability to maintain prices above $100,000 demonstrate its maturing market dynamics. However, sustained moves above $105,000 may require greater clarity on global economic conditions and continued institutional engagement.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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