Bitcoin Price Prediction – BTC Eyes $106,000 as Price Rebounds

Highlights:

• Bitcoin is trending toward the $102,513 resistance
• Price rebound was driven by positive news coming out of the US
• A rally through the $102,513 resistance could see Bitcoin rally to $106,000

Bitcoin is in a minor correction today after a rebound late Monday, February 2, trading. Nonetheless, the overall momentum seems more to the upside for Bitcoin. At the time of going to press, Bitcoin was trading at $98,749.19. It is still up by 2.87% in the day, despite losing the $100k mark after briefly surpassing it on Monday. 

However, trading volumes are declining in the day, down by 19% to $81.76 billion. This indicates that most investors are not selling and are staying away from the market. It could be an indicator that they are bullish on Bitcoin.

Bitcoin Price Surge Linked to US Sovereign Wealth Fund News

Multiple factors are driving the rising bullish sentiment around Bitcoin. One of them is the possibility of the US creating a Bitcoin reserve. Yesterday, Donald Trump signed an executive order mandating the federal government to investigate the creation of a sovereign wealth fund. 

This new development has led people to question the fund’s investment strategies, including the possibility of buying Bitcoin. While Trump and the rest of the team did not confirm any predictions regarding the proposed fund, some people, including industry advocates and a couple of lawmakers, stated that Bitcoin might be included.

Could the U.S. Government Purchase Bitcoin?

After the announcement, Wyoming Senator Cynthia Lummis teased on social media that the sovereign wealth fund may be used to buy Bitcoin, which caused speculation amongst crypto enthusiasts. Bitcoin enthusiast Wayne Vaughan also commented that both Bessent and Lutnick are very Bitcoin-positive and implied that the fund could invest in digital currencies.

This is a ₿ig deal. https://t.co/ZShfQcEGwc

— Senator Cynthia Lummis (@SenLummis) February 3, 2025

Legal and Political Issues Still Driving Bitcoin Volatility

However, the optimism around Bitcoin is cautious at best. That’s because, despite Trump’s order, there could be due to the legal issues the order is likely to face. It is expected that Trump’s executive order will come under fire for scrutiny like many of his most recent directives that have already turned legal. 

Since returning to the White House on January 20, President Trump has issued several executive orders that many argue overstep the limits of the office. For example, a federal judge recently ruled an attempt to withdraw birthright citizenship unconstitutional and blocked the order.

Latest News on Tariffs Sending Bullish Signals for Bitcoin Price Nonetheless

News about tariffs is part of the increased volatility around Bitcoin. Bitcoin’s Kimchi Premium, which measures the price of bitcoin in South Korea compared to global markets, has ballooned to 12%, a three-year high. This indicates the high volatility in Bitcoin and the international financial markets. However, things could improve now that Trump has said he is holding off on some of these tariffs on US neighbors. 

I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl. Nearly…

— Justin Trudeau (@JustinTrudeau) February 3, 2025

Trust returned when diplomats led talks to pause tariffs for Mexico and Canada. Following the talks between Donald Trump and Canadian PM Justin Trudeau, the United States agreed to set tariffs for thirty days as both countries tried to reach a broad-based border security deal. Claudia Sheinbaum, Mexican President, confirmed that conversations around the tariffs had taken place, resulting in a delay of one month.

Technical Analysis – Bitcoin Bulls Fighting to Regain Control

After a steep correction on February 3, Bitcoin bears lost control at $92,124. This saw Bitcoin establish strong support at $93,373. However, bears are fighting to regain control after hitting resistance at $102,513.

If bulls sustain momentum and push Bitcoin through the $102,513 resistance, a rally to prices as high as $106,000 could follow in the short term. Conversely, if bears regain control, Bitcoin could drop back to $93,373 in the short term.

The Future and Market Recovery Projections

With the addition of the sovereign wealth fund initiative and the ongoing tariff negotiations, the odds look good for Bitcoin. Sentiment is already turning positive across multiple metrics. The Crypto Fear & Greed Index is now neutral, an improvement from its standing at fear over the weekend. It indicates that investors expect Bitcoin to exceed $100k in the short to medium term.