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Bitcoin (BTC) surged more than $2,000 to reclaim the $66,000 level Tuesday evening, driven by risk-on positioning ahead of the State of the Union address by President Donald Trump.
While the asset has since retraced slightly to trade near $65,500, according to CoinGecko, the move signals a potential localized bottom as traders digest the administration’s economic messaging amidst a broader equity rally.
Trump Address Fuels Risk-On Rotation into Bitcoin
The immediate catalyst for the price action was the State of the Union address, where President Trump framed his first year back in office as an economic “turnaround for the ages.”
By highlighting falling mortgage rates and a 1.7% decline in core inflation over the last three months of 2025, the address provided a macro tailwind for risk assets that had been battered by regulatory uncertainty.
Markets reacted favorably to the pledge that the U.S. economy would “never go back” to previous policies, spurring a relief bounce that saw Bitcoin climb from approximately $64,000 to peak at $66,000 just before the 9 pm ET speech.
This reaction starkly contrasts with earlier volatility, where Bitcoin price fell below $65k on Trump tariff risk-off fears, highlighting the market’s extreme sensitivity to fiscal signaling.
Post-Trump Address: Can Bitcoin Bulls Defend $64,500?
Bitcoin’s rejection at $66,000 has left price action in a precarious consolidation zone. The asset is currently trading up about 3.7% on the day, but the inability to close a 4-hour candle above $66,500 suggests buy-side exhaustion is still present.
Support is forming firmly at $64,500. If that slips, it gives weight to claims by Polymarket and CryptoQuant that $55,000 may be the next local bottom.
Recent data shows that $370M in liquidations were required to defend the $60k level earlier this week, indicating that deep support exists lower down, but bulls cannot afford another tests of those lows if the recovery narrative is to hold.
Three metrics are currently flashing capitulation-level readings, with Bitcoin still down nearly 50% from its October 2025 ATH. While short-term engagement has increased, the lack of follow-through volume at $66,000 remains a concern for technical traders looking for a trend reversal.
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Risk Sentiment and Nvidia Correlation
The broader market context suggests Bitcoin is once again trading in high correlation with equities. Asian stocks rallied overnight, and markets are optimistic ahead of Nvidia’s earnings report due Wednesday.
This tech-led optimism has spilled over into crypto, specifically benefiting altcoins a little more than Bitcoin, like Solana, which is up 8% in the last 24 hours, and Chainlink, which rose 5% in the same period.
However, institutional flows tell a more cautious story. Recent ETF outflows signal institutional caution, with smart money hesitating to deploy capital aggressively until a clear break above structural resistance occurs.
If Nvidia earnings disappoint, the risk-off rotation could drag Bitcoin back toward the $63,000 range regardless of Trump’s fiscal promises.
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What Happens Next?
Traders must watch two specific levels in the next 24 hours. For the bullish rebound to sustain, Bitcoin needs to reclaim $67,500 to confirm a break from the local downtrend. A close above this level opens the path to $70,000.
Conversely, a breakdown below $64,000 invalidates the post-speech bounce. Market sentiment remains fragile; currently, Polymarket odds show traders pricing in a potential drop to $55k if macro headwinds persist. Until $67,500 is reclaimed, the trend favors the bears.
