Bitcoin’s price has fallen by over 5% in the last 24 hours, dropping to $88,100 following the announcement of the US Strategic Bitcoin Reserve by President Donald Trump. Market participants had anticipated a bullish catalyst, but the details of the reserve fell short of expectations, leading to a negative reaction across the crypto market.
US Strategic Bitcoin Reserve Fails to Meet Expectations
On March 7, President Trump signed an executive order to establish a Strategic Bitcoin Reserve. Many traders and analysts expected this reserve to involve new government purchases of Bitcoin using taxpayer funds or Treasury resources. Instead, the reserve will consist of Bitcoin already seized by the US government as part of criminal or civil asset forfeiture proceedings.
David Sacks, Trump’s crypto policy advisor, clarified that the reserve would not require taxpayer funding. “The Reserve will be capitalised with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it will not cost taxpayers a dime,” Sacks posted on social media platform X. He added that strategies to acquire more Bitcoin in a budget-neutral manner would be developed in the future.
BTC/USD daily chart.
This cautious approach disappointed many investors who had hoped for immediate new capital inflows into Bitcoin. Market reaction was swift, with Bitcoin falling 8.7% from a high of $92,790 on March 6 to an intraday low of $84,700 on March 7.
Capital markets commentator The Kobeissi Letter noted, “Bitcoin falls sharply after President Trump signs Executive Order establishing a Strategic Bitcoin Reserve. This is because there is no explanation on how the reserve will be funded aside from Bitcoin already held by the US. It’s simply a promise to not sell what they currently hold.”
Spot Bitcoin ETF Outflows Weigh on Price
In addition to the disappointment surrounding the Bitcoin reserve, the market has also been impacted by continued outflows from spot Bitcoin exchange-traded funds (ETFs). Over the last 14 days, bearish sentiment has led to approximately $3.87 billion in withdrawals from spot Bitcoin ETFs.
On February 25, these ETFs recorded a single-day outflow of $1.14 billion, the largest since their introduction. More recently, on March 6, an additional $134.3 million was pulled from these funds.
Crypto insights firm Alva attributed the outflows to investor uncertainty regarding decentralisation. “Investors are jittery about decentralisation. Major players like Fidelity’s FBTC and ARK’s ARKB are feeling the heat with big withdrawals, signalling market trepidation,” the firm stated.
Bitcoin Faces Critical Support Level
Bitcoin’s recent price movements have brought it close to a key technical support level, the 200-day exponential moving average (EMA), currently positioned at $85,550.
Technical analysts suggest that holding above this level could allow Bitcoin to rebound towards a resistance zone between $92,800 and $94,000. If Bitcoin manages to clear this zone, it could potentially retest the $100,000 level while confirming $78,000 as a local bottom.
Spot Bitcoin ETFs netflows. Source: Sosovalue
However, a daily close below the 200-day EMA could lead to a deeper correction. In such a scenario, Bitcoin’s price may fall toward the $81,500 level (March 4 low) or even further down to $78,200 (February 28 low).
Crypto trader Daan Crypto Trades highlighted these key levels, noting that Bitcoin is currently range-bound with support at $90,800 and a recent all-time high of $109,000.
Market Awaits Further Developments
Bitcoin’s next move is likely to be influenced by ongoing market sentiment, government policy, and ETF flows. Investors will be closely watching the White House Crypto Summit for further developments that could shape Bitcoin’s trajectory in the coming days. For now, Bitcoin remains in a fragile position, with traders keenly observing whether it can hold above key technical levels or risk a further decline.
