Head of the U.S. Fed rejects idea of national Bitcoin reserve

On December 18, the U.S. Federal Reserve lowered the key interest rate by 25 basis points to 4.25–4.5%. During a press conference, Jerome Powell stated that the creation of a national bitcoin reserve is not part of the regulator’s plans. Responding to a question from Neil Irwin of Axios about possible benefits, Powell emphasized that the Fed does not see the need to use bitcoin as a reserve asset.

Market reaction to Fed chair’s statement

After Powell's speech, the price of BTC dropped, breaking the psychological level of $100,000, falling to $98,802 on Binance. However, by the morning of December 19, the price had recovered to $101,000. Market optimism was supported by statements from Donald Trump, who in an interview with CNBC on December 12 confirmed his intention to create a national bitcoin reserve, and some analysts expected an executive order to create the reserve by January 20.

From support to skepticism

The idea of a national bitcoin reserve sparked mixed opinions. At the state level, it received support, but experts were divided. Dennis Porter from the Satoshi Action Fund proposed a financing mechanism without changes to legislation. At the same time, former BitMEX CEO Arthur Hayes expressed skepticism, predicting a “painful crash” in the market if expectations do not materialize. Jamie Coates from Real Vision also warned of a potential correction in the price of the first cryptocurrency in the next two to three months.

Technical view on the price

Technical analyst Ali Martinez pointed out that the price of the crypto asset broke the key level of $105,400, forming a “Head and Shoulders” pattern. For the uptrend to resume, the cryptocurrency must rise above this level; otherwise, bearish sentiment will continue to dominate the market.