Bitcoin Approaches $110K Amid Trump Reserve Speculation - Market Risks Ahead

Bitcoin Sets New Record: Surges to $109,356

On January 20, Bitcoin captured market attention by reaching an astonishing peak of $109,356. This surge has been significantly influenced by increasing speculation concerning President-elect Donald Trump’s potential policy regarding Bitcoin reserves. Data from Polymarket suggests a solid 60% probability that Trump may introduce a strategic BTC reserve during the initial phase of his presidency, invigorating bullish sentiment within the cryptocurrency landscape.

Traders Face Risks Amid New Highs

As confirmed by Cointelegraph Markets Pro and TradingView, Bitcoin's remarkable rise has led to daily gains exceeding 8%. This achievement propelled BTC past the crucial $100,000 resistance level. However, market analysts voice caution regarding potential downside risks as enthusiastic trading activity unfolds.

Crypto analyst Skew highlighted alarming signals concerning market liquidity, warning traders that the current market behavior might be setting traps for latecomers. According to Skew’s analysis of Binance's order book, substantial sell orders are clustering around the $110K mark, leading to concerns about possible price corrections.

"Price is testing supply here, potentially front-running tomorrow to create exit liquidity," Skew noted in a recent post on X.

Liquidations Spike Amid Bullish Surge

Despite the optimistic breakout, data indicates market strain, with more than $1 billion in long liquidations occurring in the last 24 hours. Traders entering at such record-high levels now face escalating risks, as analysts warn that the bullish rally could swiftly reverse if sell pressure escalates.

Market Speculation on Trump's Crypto Policies

Market participants are actively speculating that Bitcoin’s current price momentum might be swayed by insider information regarding the Trump administration's potential supportive stance toward cryptocurrency initiatives. Reports speculate the possibility of the government allocating BTC, alongside select altcoins, into a strategic reserve, further igniting market optimism.

According to the prediction platform Polymarket, confidence in this scenario is on the rise, with the odds exceeding 50% on January 20. Well-known figures in the crypto landscape, like hedgedhog, commented that "someone clearly knows something" regarding Bitcoin's trajectory during Trump's term.

Will BTC Hit $110K?

Analysts like IncomeSharks express that the breakout pattern from the recent consolidation phase signals strong potential for further gains. "Doesn’t get much cleaner than that," they remarked, underscoring Bitcoin's technical breakout.

However, as Bitcoin nears the difficult supply barriers around $109K to $110K, caution is advisable. Analysts, including Skew, are alerting investors to the prospect that significant ask liquidity could hinder continued upward momentum.