Bitcoin Weakens Despite Trump Calling US ‘Crypto Capital’

Bears gain control as BTC trades below major support zone

After failing to break through $82,000 at the beginning of May, Bitcoin started a fresh selloff, which is still underway, despite Trump declaring the US the ‘crypto capital of the world’. The selloff was accelerated by massive spot Bitcoin ETF outflows, with BlackRock’s IBIT fund leading the charge.

On Wednesday, a total of $733 million exited Bitcoin ETFs, and IBIT alone bled more than $527 million. This marks the 8^th consecutive day of outflows and coincides with an accelerated depreciation of Bitcoin.

Currently, there’s a general aversion towards risk-on assets, fuelled by reduced hopes of a rate cut by the Fed and the ongoing unrest coming from the Middle East conflict. Despite Trump announcing that a peace deal is near, sentiment deteriorated after the US Central Command launched strikes on Iranian facilities near the Strait of Hormuz earlier in the week. The strikes happened after Iran launched a platform called Hormuz Safe, which is designed to process Bitcoin transactions in exchange for safe passage through the Strait.

The “CRYPTO CAPITAL of the WORLD”

During his election campaign, President Trump made it clear that he is a crypto supporter and vowed to make America the crypto capital of the world. In a Truth Social post on Thursday, he criticized former SEC Chair Gary Gensler, saying that he and the “Anti-Crypto Army” nearly “DESTROYED the American Crypto Industry.”

The President then continued by saying that “TRUMP SAVED IT” and declaring that “America is now the CRYPTO CAPITAL of the WORLD”, and adding: “Under my Leadership, we will codify a FUTURE-PROOF Digital Asset Market Structure that cannot be undone by the Crypto Haters.”

Some would argue that America is not the crypto capital of the world and that the CLARITY Act is dragging on for too long. However, there’s a clear pro-crypto vibe, especially compared to the Biden era, but it looks like the President’s post is not enough to drive crypto higher, at least not in the current macro environment.

Chart Analysis – BTC/USD

After a picture-perfect rejection at the 200 Moving Average (red line on the chart), Bitcoin has exited the ascending channel and moved below the support zone between $77K and $75K. On Thursday, it traded as low as $72,600, and it looks like the bearish move is accelerating.

The orange line on the chart is the 100-day Moving Average, which can provide some support and push the price higher, but a break below it would probably send BTC towards the next support, located around $71K. The RSI is bearish, without being oversold, which supports a scenario in which we will see lower prices. A bullish shift would likely need some support from the macroeconomic scene.