Current BTC Market Situation
On the evening of March 2, 2025, Donald Trump unveiled details of the U.S. cryptocurrency reserve creation. This triggered a rapid surge in Bitcoin, which briefly exceeded $95,000 but was followed by a sharp correction. At the time of writing, the BTC price has dropped to $83,976.
Following the sharp spike, the Bitcoin price returned to levels where increased market participant activity was observed. Such movements are often accompanied by heightened volatility and are associated with liquidity seeking.
Additionally, the Bitcoin Fear and Greed Index has fallen to extremely low values, indicating high investor anxiety. Such situations are usually accompanied by sharp price fluctuations.
Main Reasons for the Bitcoin Decline
Macroeconomic Instability
Cryptocurrency prices have been in a prolonged decline phase since mid-February amid growing concerns about Trump's tariff policies. The U.S. President announced on Tuesday a 20% tariff for China and 25% tariffs for Canada and Mexico. These measures have reduced investor interest in risky assets, including cryptocurrencies.
Moreover, uncertainty in global financial markets has reinforced the trend of reducing investments in volatile assets such as Bitcoin.Uncertainty Around the U.S. Crypto Reserve
The initially positive market reaction to the U.S. crypto reserve news quickly turned into caution. Bitcoin jumped to $94,500 after Trump announced including Bitcoin (
$BTC ), Ethereum (
$ETH ), XRP (
$XRP ), Solana, and Cardano in the country's strategic digital asset reserve. However, traders realized that the initiative would require a lengthy approval process and could face legislative hurdles. This reduced confidence in the project's rapid implementation and led to profit-taking.Correction After Rapid GrowthSpeculation and expectations of positive news drove the Bitcoin surge to $95,000. However, amid high macroeconomic instability, the market quickly returned the price to levels where large trading volumes are concentrated. This is typical behavior for assets with high volatility.Altcoins, which previously showed even greater growth, are now experiencing a deeper decline. Ethereum, XRP, Solana, and Cardano have lost a significant portion of their positions, and the weekly dynamics remain negative.Position LiquidationsThe sharp drop in the Bitcoin rate triggered the liquidation of long positions totaling $150 million in just a few hours. Automated sales amplified the downward momentum, and traders who failed to close their positions in advance suffered losses.
What to Expect Next?
Despite the current correction, further Bitcoin dynamics remain uncertain. Possible scenarios:
If Bitcoin holds within the $80,000–$85,000 range, it could create conditions for a new uptrend.In case of worsening economic conditions, BTC may test lower support levels. The next support level is $75,000. This could become a turning point if the decline continues.An important support range is $70,000–$69,000, which coincides with the historical high of 2021. A drop to this level could become a significant turning point and mark a 36.6% correction from the peak, which can be seen as a healthy pullback within the ongoing bull trend. This scenario is possible in case of bad news at the crypto summit on Friday.
Cryptocurrency Summit
This week, the White House will host a cryptocurrency summit, which could be a key event for the market. If specific details on the crypto reserve or new regulatory initiatives are announced, it could give the market momentum for growth. However, the absence of clear decisions or negative signals could amplify the downward dynamics.
Conclusion
The Bitcoin decline is due to a combination of macroeconomic factors, uncertainty regarding government initiatives, and market volatility. It is important to consider these risks and approach capital management prudently, avoiding panic and hasty decisions.
If you want to understand the bigger picture, read my previous articles, in which I analyzed in detail the factors that caused the decline and explained how to avoid mistakes.
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