Market reaction to Trump's State of the Union address fueled market sentiment, driving up Bitcoin prices

Trump's speech, which described a "plummeting inflation" and an improving economic situation, boosted risk assets by approximately 3.5%. Bitcoin surged over $2,000 on Tuesday evening, reaching $66,000 before encountering resistance and pulling back, but still found support above $64,500, entering a narrow consolidation range.

Currently, Bitcoin has slightly retreated, trading near $65,500 (Source: CoinGecko). The market is closely watching Nvidia's upcoming earnings report, viewing it as a key signal to determine the sustainability of the rebound.

In his speech, Trump defined his first year back in office as a "century-defining shift" for the economy, emphasizing declining mortgage rates and a 1.7% drop in core inflation in the fourth quarter of last year. These remarks provided a short-term boost to risk assets suppressed by policy uncertainty, driving a recovery in market sentiment. Bitcoin prices also climbed from $64,000 to a high of $66,000 before the speech.

Compared to the previous drop below $65,000 caused by concerns about tariffs, this market reaction was more positive, demonstrating the market's sensitivity to fiscal signals.

Can Bitcoin hold $64,500?

Support is around $64,500. A break below this support level would confirm the view of Polymarket and CryptoQuant that $55,000 may be the next local bottom. Latest data shows that earlier this week, the market saw $370 million in selling to hold the $60,000 level, indicating strong support below, but the bullish momentum remains insufficient for a sustained recovery.

Currently, Bitcoin is still nearly 50% away from its all-time high. While short-term trading is active, the lack of follow-through volume above $66,000 casts doubt on the possibility of a trend reversal.

Risk sentiment is closely linked to Nvidia

Recent ETF outflows indicate a cautious institutional sentiment. Analysts believe that if Nvidia's earnings report falls short of expectations, market risk aversion may intensify again, potentially pulling Bitcoin back to around $63,000.

In the next 24 hours, investors should focus on two key price levels: if it can hold above $67,500 and break through the downtrend line, a close above this level could potentially push it towards $70,000; if it falls below $64,000, this rebound may be over. Overall market sentiment remains fragile; Polymarket data shows that traders have already priced in a potential drop to $55,000. Until Bitcoin returns to $67,500, the bears remain in control.

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