Bitcoin surges ahead of Trump inauguration

Bitcoin price hits $104,077, boosted by rumors about cryptocurrency regulation under the new US president

On Friday, the price of bitcoin saw a remarkable 4.09% increase, closing at $104,077. This rally in bitcoin is attributed to speculation surrounding the inauguration of the new US president, Donald Trump. Trump seems set to take a more favorable stance towards cryptocurrencies.

Bitcoin price hit a high of $105,865 and broke out of a bearish trend line that had persisted since Dec. 18 / TradingView

Trump's strategy: An advisory board and regulatory changes

According to a Reuters report, the president-elect plans to sign an executive order to establish an advisory board on cryptocurrencies. This could facilitate the adoption of digital assets from the start of his term. In addition, Trump is expected to rescind the Securities and Exchange Commission's SAB 121 accounting guideline. It imposes high costs on banks to hold cryptocurrencies on behalf of third parties. Trump's inauguration is sparking rumors and speculation that are driving up the price of bitcoin.

Rising Interest in Bitcoin: Bills and Increased Open Interest

Amid this wave of rumors, several states, including Massachusetts and Wyoming, are introducing bills to create a strategic bitcoin reserve. At least 12 other states are reportedly considering integrating bitcoin into their asset reserves.

Total open interest in bitcoin futures also increased, with a 6.82% increase in the last 24 hours. IO reached a total of $68.33 billion, the highest figure since December 19. This increase suggests that more liquidity is flowing into the crypto system.

Institutional Capital Flow and Trading Levels

Capital flow into bitcoin through ETFs showed a positive balance for three consecutive days, accumulating $255.20 million on Friday. Digital assets under management in these funds currently total $118.29 trillion, the highest amount since Dec. 18.

Trading volume also saw a significant increase, reaching $5.70 trillion, reflecting the highest level of activity in ETFs since Dec. 20.

A trend reversal and resistance at $108,000

The price of bitcoin reached a high of $105,865 and broke out of a bearish trend line that had persisted since Dec. 18. By closing above the 50-period and 200-period moving average, the market is clearly showing bullish sentiment. However, the cryptocurrency faces resistance at $108,000, the level of its most recent all-time high.

With a potentially friendlier regulatory environment under the Trump administration, the future of bitcoin looks brighter than ever. The combination of a surge in open interest and institutional capital flow suggests that the cryptocurrency could be on track to set new records.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investing in cryptocurrencies involves risks and it is advisable to consult with an expert.