Bitcoin retreated on Thursday after the U.S. Treasury clarified it will not expand its planned Bitcoin reserve through direct market purchases. Prices briefly touched $124,120 before reversing sharply, sliding to $118,550 by the close.
As of Friday, BTC is trading at $117,929, consolidating near key support after the sell-off triggered forced liquidations in parts of the crypto futures market. Treasury Secretary Scott Bessent told Fox Business the government will rely solely on confiscated assets to grow its Bitcoin reserve, valued between $15 billion and $20 billion, and will stop selling its existing holdings.
The stance contrasts with President Trump’s earlier executive order requesting budget-neutral strategies to expand strategic Bitcoin reserves.
Bessent also highlighted a surge in tariff revenues, with July collections hitting nearly $30 billion. Annual receipts could surpass $300 billion, he said, providing room for other asset strategies, though none will include fresh BTC buys.
Market Impact and Macro Backdrop
The Treasury’s position removes a predictable, long-term market buyer, heightening the potential for sharper price swings. Thursday’s reversal followed strong U.S. Producer Price Index data for July, with annual PPI rising 3.3% and monthly figures climbing 0.9%, stoking broader debates on inflation and rate policy.
By relying on confiscated assets rather than direct purchases, reserve growth will be slower and less predictable. This makes near-term sentiment more sensitive to macroeconomic shifts, tariff policy changes, and institutional flows.
For traders, the absence of Treasury buying may reduce headline-driven upside catalysts, but it also opens the door for opportunistic entries when volatility spikes.
Bitcoin Technical Outlook: Flag Formation Signals Breakout Potential
From a technical perspective, Bitcoin price prediction remains in a constructive position despite the pullback. The price has broken free from a descending channel and is now consolidating just above the 50-period SMA at $118,819, which serves as immediate support alongside a key trendline from recent swing lows.
The 4-hour chart shows BTC forming a bullish flag pattern, trading between the 23.6% Fibonacci retracement level at $117,335 and resistance at $123,236 — a level that has twice capped advances this month. A decisive close above $123,236 could pave the way toward $126,242 and the psychologically important $130,000 target.
Bitcoin Price Chart – Source: TradingviewThe RSI stands at 54.77, down from overbought levels yet maintaining an uptrend, while the MACD histogram is contracting, often a sign that bullish momentum is rebuilding. Any retest of $117,774–$118,136 is likely to attract buyers, with deeper support at $113,650 and $110,675 if sentiment deteriorates.
If Bitcoin clears resistance in the coming sessions and institutional inflows remain steady, the stage could be set for a sustained rally toward cycle highs.
For long-term investors, this consolidation could prove to be a launchpad rather than a warning sign, a point in the chart that may one day be remembered as the prelude to a run not just toward $130K, but potentially toward $250K in the years ahead.
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