Bitcoin's price dipped below $85,000 in the early Asian trading hours on Friday following the announcement of US President Donald Trump's executive order to establish a Strategic Bitcoin Reserve. This move was expected to cement BTC's position in the nation's economy, but instead has stirred up volatility in the market, resulting in over $250 million in liquidations within the past day.

Trump's decision to create a Strategic Bitcoin Reserve was signed on Thursday, sparking a surprising bearish reaction from the market. Traders hurried to sell off their assets, leading to a decrease in BTC's value. The cryptocurrency dropped to a low of $84,667 before experiencing a slight rebound, but still remains down by 5% in the last 24 hours.

The price decline triggered a wave of liquidations in BTC's futures market, totaling $261 million according to Coinglass data. Majority of these losses were from long positions, indicating that traders who were optimistic about a price surge were caught off guard by the sudden downturn. BTC long liquidations currently stand at $115.60 million, marking a three-day high.

As a result of the decreasing price and the executive order, BTC's open interest has also decreased by 5% to $50 billion. This drop signals reduced trading activity, with traders closing positions rather than opening new ones. The weakening market sentiment among BTC holders suggests a potential extended decline in the near future.

BTC's decline coincides with an upcoming crypto summit, raising concerns about further price drops and a possible retest of the support level at $85,357. Failure to defend this level could push the coin towards $80,580; however, a resurgence of bullish activity could propel BTC back above $90,000 and towards $92,247.