Bitcoin (BTC/USD) Eyes Bull Flag Breakout as Trump Allows Bitcoin and Crypto in 401(k)s

[Redator]

Bitcoin has recovered from a recent pullback thanks in part to improving market sentiment, a weaker US Dollar and recent crypto developments in the US.

Bitcoin has rallied some 4.5% from the recent lows around the 112k mark on August 2. This low came in a day after market expectations regarding Federal Reserve rate cuts saw a significant shift in tone and the US Dollar rally fizzled.

Another positive development for both Bitcoin and Crypto markets came earlier today as President Donald Trump signed an executive order that aims to allow 401(k) investors access to alternative assets (such as digital assets).

Trump Signs Executive Order to Allow Bitcoin and Crypto in 401(k)s

During the US session, the president of the United States, Donald Trump, signed an Executive Order that aims to allow 401(k) investors access to alternative assets (such as digital assets).

According to the official announcement:

“The order directs the Secretary of Labor to reexamine the Department of Labor’s guidance on a fiduciary’s duties regarding alternative asset investments in ERISA-governed 401(k) and other defined-contribution plans.”

This comes as part of Trump’s plans to establish the country as the leading player in the cryptocurrency industry. To this point, the order also stipulates that “alternative assets, such as private equity, real estate, and digital assets, offer competitive returns and diversification benefits.”

The move saw cryptocurrencies as a whole benefit, Bitcoin's price is now over $117,000, up 2% today. Ethereum (ETH), a hot topic among altcoins recently, has risen by 5%.

The move could see greater institutional flows as market participants who have not had crypto investments in the past could look to include a portion in their 401k.

ETF Flows Reflect Changing Market Dynamics

Looking at ETF flows over the past week and they do reflect in part the changes to market conditions. ETF flows had enjoyed 5 consecutive days of inflows ahead of the Fed meeting.

This came to an end as Fed Chair Jerome Powell adopted rather hawkish rhetoric in his post FOMC meeting comments. This saw inflows stop with 4 consecutive days of outflows as markets eyed the possibility of higher rates fro longer.

Fridays Jobs data however through a spanner in the works. Outflows did not cease immediately despite the weak jobs data and continued at the start of this week but have since stalled.

The last two days have seen modest inflows of around 91.5 and 74 million US Dollars. A sign that the tide is turning?

Source: Farside Investors

Technical Analysis - BTC/USD

From a technical standpoint, Bitcoin has had a retest of breakout support level around the 112k handle and has since rallied higher.

Looking at the H4 chart below we can see that bitcoin has been in a bull flag pattern since printing fresh all-time highs July 14 2025.

The rally higher has now reached the top end of the bull flag pattern having broken back above the 50, 100 and 200-day MAs. Surprisingly on Tuesday August 5 we had a death cross pattern which Bitcoin seemed to ignore and continued its rally to the upside. A sign of bullish momentum?

As things stand Bitcoin is eyeing a potential break of the bull flag pattern which could lead to a rally to around the 125k handle.

Looking at price action, the fact that we have just printed a higher high means a pullback toward the swing low at 114555 before continuing higher and breaking out of the bull flag pattern.

A four-hour candle close below the 114555 handle would invalidate this setup and could lead to a retest of the lower end of the bull flag pattern.

Immediate resistance rests at the 120000 mark before the 120900 and all-time high at 123236.

Support may be located at 114555, 112916 and 112000.

Bitcoin (BTC/USD) Daily Chart, August 8, 2025

Source: TradingView.com (click to enlarge)

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