Bitcoin (BTC-USD) briefly touched $90,000 on Wednesday before falling to roughly $88,000 as President Trump offered encouragement on legislation in Congress that could serve as a catalyst for crypto prices.
The token rallied 1% after Trump said he was working “to ensure America remains the crypto capital of the world.”
“Congress is working very hard on crypto market structure legislation … which I hope to sign very soon,” said Trump at the World Economic Forum in Davos.
The president’s comments raised hopes for a broader regulatory framework after the bill hit a snag last week when trading platform Coinbase (COIN) withdrew its support ahead of a key markup session.
Coinbase CEO Brian Armstrong cited “too many issues” with the draft, including amendments that he said “would kill rewards on stablecoins” and allow banks to “ban their competition.”
On Wednesday, Polymarket showed a 40% chance that Congress would pass crypto market structure regulation in 2026, down from a probability as high as 80% on Jan 12.
Read more: How to navigate a crypto meltdown: ‘Be willing to hold on’
Bitcoin has been down about 8% since bouncing off $98,000 last week. The move may signal a near-term bearish indicator, according to Compass Point analyst Ed Engel.
“Until BTC reclaims the average cost basis of Short-term Holders (currently $98k), we remain cautious towards chasing rallies,” Engel said in a note on Tuesday night.
Fundstrat’s head of digital assets Sean Farrell was also wary of the recent price moves, noting bitcoin treasury giant Strategy’s (MSTR) purchase of about $2.13 billion worth of tokens over the past eight days failed to keep prices meaningfully higher.
“It’s never a good sign when you have these large incremental flows unable to sustain momentum,” Farrell said.
Meanwhile 10X Research noted “bitcoin still looks constructive, and we continue to view the latest pullback as a buying opportunity, with positioning biased to the long side.”
“A sustained break below $87,000 would invalidate our current view and mark a painful retracement of the rebound attempt,” the firm’s note read on Tuesday.
Bitcoin has erased much of its year-to-date gains following a dismal fourth quarter last year in which the token turned negative for the year.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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