Bitcoin Faces Sharp Decline
Bitcoin’s price has dropped over 5% in the past 24 hours, falling to $88,100 after US President Donald Trump’s announcement of a Strategic Bitcoin Reserve failed to meet market expectations. The flagship cryptocurrency had earlier reached a high of $92,790 on March 6 before tumbling to an intraday low of $84,700 on March 7.
Disappointment Over US Bitcoin Reserve
The crypto market reacted negatively to Trump’s directive establishing a Strategic Bitcoin Reserve. Market participants had anticipated that the US government would purchase additional Bitcoin using taxpayer funds or Treasury resources, injecting fresh capital into the market.
However, Trump’s crypto advisor, David Sacks, clarified that the reserve would be composed of BTC already seized by the government through asset forfeiture proceedings. He stated that this approach would not cost taxpayers any money but left open the possibility of acquiring more Bitcoin through budget-neutral strategies. The lack of immediate buying pressure from the US government disappointed traders who had hoped for a bullish catalyst, such as the approval of spot Bitcoin ETFs last year.
XRP/USD weekly price chart. Source: TradingView
Commenting on the development, 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 ETFs See $3.8 Billion in Outflows
The decline in Bitcoin’s price has been accompanied by significant outflows from spot Bitcoin ETFs. Over the past two weeks, these investment products have seen withdrawals totalling approximately $3.87 billion. On February 25 alone, there was a record single-day outflow of $1.14 billion, the largest since the introduction of Bitcoin ETFs. Another $134.3 million exited these funds on March 6.
XRP/BTC two-week price chart. Source: TradingView
Crypto insights firm Alva linked the latest outflows to concerns surrounding Trump’s Bitcoin Reserve proposal, stating, “Investors are jittery about decentralization. Major players like Fidelity’s FBTC and ARK’s ARKB are feeling the heat with big withdrawals, signalling market trepidation.”
Key Technical Levels to Watch
Bitcoin’s recent price action suggests it is hovering near a critical support level at the 200-day Exponential Moving Average (EMA), currently at $85,550. Maintaining this level could allow BTC to rebound toward a resistance zone between $92,800 (100-day EMA) and $94,000 (50-day EMA). A successful move above this range would position Bitcoin to retest the psychological $100,000 level while confirming $78,000 as a local bottom.
Conversely, a daily close below the 200-day EMA could trigger a deeper correction, potentially driving Bitcoin toward $81,500 (March 4 low) and even $78,200 (February 28 low). Popular trader Daan Crypto Trades highlighted these levels, noting that Bitcoin’s price is at a critical juncture ahead of the upcoming White House Crypto Summit.
With uncertainty surrounding the US government’s Bitcoin strategy and continued ETF outflows, traders will closely monitor these technical levels to gauge Bitcoin’s next move.
