The recent geopolitical and regulatory developments have played a significant role in Bitcoin's price movement. The Trump administration's announcement of plans to establish a national Bitcoin reserve has generated interest, indicating a potential shift in U.S. policy towards cryptocurrencies. This move, coupled with efforts to create a clear legal framework for digital assets, could foster market growth. However, the market remains cautious as the SEC restructures its crypto enforcement team, aiming to clarify the legal status of cryptocurrencies. Despite these positive signals, Bitcoin's price has faced downward pressure due to tightening USD liquidity, exacerbated by the U.S. Treasury General Account's increased cash balance. This liquidity squeeze is typically unfavorable for asset classes like crypto, and the market is still digesting the impact of recent mass liquidations.
The ProShares Short Bitcoin Strategy ETF (BITI) saw a modest increase, rising 0.53% to $22.67 as of 4:20 AM on Wednesday, February 5.