Bitcoin drops after US state reserves fail

The leading cryptocurrency falls to $86,050, its lowest level in weeks, as the cryptoasset market faces a climate of fear and significant capital outflows.

The price of Bitcoin experienced a significant drop of 3.14% on Tuesday, reaching a low of $86,050, after the failure of proposals to create state reserves of the cryptocurrency in Montana, North Dakota and Wyoming. This collapse was reinforced by the fall in consumer confidence and fear of a recession in the US, which generated a climate of uncertainty in the crypto market.

Bitcoin price confirmed the breakout of the 100-period moving average, sending a bearish signal in the medium term. / Tradingview

State Bitcoin reserves fail

According to a Reuters report, three US states — Montana, North Dakota and Wyoming — showed reluctance to adopt government-run Bitcoin strategic reserves. Policymakers are seeking to avoid accusations of speculating with public funds, which has disappointed the crypto sector. These initiatives came after former President Donald Trump's announcements to create a national Bitcoin reserve, but its failure negatively impacts the market.

Consumer confidence and recession fears

Bitcoin's fall was also influenced by The Conference Board's consumer confidence index, which recorded 98.3 points, well below the consensus of 102.5 points. This figure, the lowest since August 2021, revived fears of a recession amid the uncertainty generated by Trump's tariff policy. Consumers were pessimistic about future business conditions and less optimistic about their income, which affected risk assets such as Bitcoin.

Cryptocurrency market in "fear" mode

Coinmarketcap's fear and greed index fell to 29 points, indicating a climate of fear in the market. In the last 24 hours, 2,458 BTC were recorded inflows to centralized exchanges, according to Coinglass, suggesting that investors are liquidating positions.

Futures and ETFs also in the red

In the futures market, Bitcoin open interest fell 5.34%, reaching $56.91 billion, its lowest level since November 2024. Meanwhile, Bitcoin ETFs recorded net outflows of $516.40 million, marking the fifth consecutive day of capital withdrawals.

Where is Bitcoin going?

The price of Bitcoin confirmed the breakout of the 100-period moving average, sending a bearish signal in the medium term. However, it remains above the 200-period moving average, which acts as dynamic support at $85,650, keeping the long-term bullish trend intact. Trading volume doubled, supporting the consistency of the fall.

Although the Bitcoin market faces a climate of uncertainty and fear, some technical indicators suggest that the cryptocurrency could be oversold in the short term. Meanwhile, investors are waiting for clear signals on the Federal Reserve's monetary policy and its impact on digital assets.

Disclaimer: This news is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and carry significant risks.