Bitcoin's recent price fluctuations exceeded $10,000 intraday.
Volatility was driven by Trump's strategic reserve announcement and subsequent tariff policies.
High-profile events scheduled this month contribute to market uncertainty.
Opinion
The current volatility in Bitcoin is heavily influenced by conflicting and unclear policy signals. While potential policy developments hold long-term bullish possibilities, immediate trade conflicts and monetary uncertainties significantly increase short-term risk.
Core Sell Point
Due to heightened volatility and policy uncertainties, investors should consider reducing short-term exposure to Bitcoin.
Bitcoin (BTC) has recently undergone extreme price fluctuations, primarily influenced by contrasting announcements from the U.S. administration under President Donald Trump. On February 2, Trump's unexpected declaration to include Bitcoin, Ethereum (ETH), and XRP as U.S. strategic reserve assets pushed Bitcoin above $94,000. Shortly thereafter, the imposition of tariffs on China, Mexico, and Canada triggered sharp declines, bringing Bitcoin down to around $82,000 within days.
The ongoing volatility is compounded by upcoming high-profile events, including the White House Virtual Asset Summit and the U.S. SEC's first virtual asset roundtable, both creating substantial anticipation and uncertainty in the market. Despite these potentially bullish developments, unresolved questions about Trump's crypto-reserve policy and unclear signals from the Federal Reserve regarding interest rate adjustments continue to cloud Bitcoin's short-term outlook.
Experts note the volatility is exacerbated by reduced "cash-and-carry" trading activity, indicating increased market caution. Matrixport emphasizes that traders remain largely in risk-off mode, avoiding new long positions until macroeconomic uncertainties diminish. Investors are advised to maintain a prudent stance and carefully manage risk until clearer signals emerge.
