Bitcoin's price saw a sharp 6% decline following David Sacks’ highly anticipated press conference on February 4, 2025. Market participants had expected strong pro-crypto policy signals from the Trump administration. However, the event failed to deliver the bullish catalysts that traders had hoped for, leading to a wave of selling pressure.

Before the conference, BTC/USD struggled to maintain levels above $105,000, facing strong resistance. When Bitcoin dropped below the 50-day and 200-day Exponential Moving Averages (EMAs) at $100,614 and $100,347, a deeper sell-off ensued. Investors were disappointed by the lack of immediate policy commitments, which dampened bullish sentiment.

Traders had speculated that the U.S. government might integrate Bitcoin into sovereign reserves or introduce tax incentives for digital assets. Instead, Sacks confirmed that no direct institutional allocation into BTC was planned. Officials only mentioned exploring the concept of a Bitcoin Strategic Reserve, which market analysts saw as vague political rhetoric rather than a concrete commitment.

Additionally, the Trump administration reinforced its focus on stablecoins, positioning USD-backed digital assets as a superior alternative to Bitcoin. This emphasis on stablecoin growth signaled that policymakers were more interested in strengthening the dollar’s dominance than promoting Bitcoin as a reserve asset.

Independent analyst TCB noted that Elon Musk’s plan to cut $4 billion daily from the federal budget, alongside Trump’s pro-business stance, could diminish Bitcoin’s appeal as an inflation hedge. Without inflation concerns, the demand for BTC as a store of value could weaken.

As a result, speculators quickly adjusted their positions, leading to an increase in USDT supply on exchanges, which hit a record high of 42.445 billion. This trend indicates that traders moved capital into stablecoins, likely adopting a wait-and-see approach until clearer signals emerge for Bitcoin.

From a technical perspective, Bitcoin is now trading around $97,845, hovering near the 50-day EMA at $98,804. The market remains at a pivotal point, with BTC’s next move depending on whether it can reclaim $108,000 or break down further. A breakout above resistance could push Bitcoin toward $110,000 or higher, while a drop below $92,000 may expose the asset to declines toward $85,000.

For now, investors remain cautious as the broader crypto market processes the implications of Sacks' statements and the administration's policy stance.