Bitcoin (BTC) prices have fallen by more than 5% in the last 24 hours to $88,100 as President Donald Trump's US Bitcoin Reserve failed to meet expectations.
BTC/USD daily chart. Source: Cointelegraph/TradingView
Important takeouts:
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The Bitcoin drawdown follows the announcement of US President Donald Trump's strategic Bitcoin reserve.
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More spills from Spot Bitcoin ETFs.
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Bitcoin prices should be kept above the main support area to avoid deeper corrections.
Bitcoin's strategic reserves are not meeting expectations
Bitcoin and collective crypto markets reacted negatively to President Trump's orders by the US President to establish a Bitcoin Reserve, and set up another crypto stockpile.
Important takeouts:
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On March 7, the US President signed an executive order to create a strategic Bitcoin Reserve.
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Market participants were hoping the government would announce plans to use taxpayer funds or Treasury resources to buy more Bitcoin.
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Rather, the reserve consists of BTC already seized by the government, according to Trump's crypto emperor David's bag.
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In a March 7th post on XSac said:
“This reserve will be capitalized with federal-owned Bitcoin, which has been confiscated as part of a criminal or civil assets forfeiture procedure. This means that taxpayers will not be charged one-for-cost.”
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However, the government will develop strategies to acquire more BTC through budget-neutral strategies.
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Nevertheless, hopes that this immediate fresh capital would flow into the Bitcoin market have been curtailed.
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This conservative approach has disappointed traders who expected a more bullish catalyst, including the approval of the Spot Bitcoin ETF last January.
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Bitcoin responded to these developments, falling 8.7% from the high on March 6 to $92,790 from the price of $84,700 on March 7.
“Bitcoin falls sharply after President Trump signs an executive order establishing a strategic Bitcoin reserve,” said Capital Market commentator The Kobeissi Letter.
“This is because there is no explanation for how the reserves will be funded, except for the bitcoin that the US already holds. It's simply a promise not to sell what they have now.”
We'll reduce Bitcoin ETF by $3.8 billion in two weeks
Massive spills from Spot Bitcoin ETFs have preceded the decline in BTC performance over the past 24 hours.
Key Points:
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Bitcoin's sharp bearish price movement over the past 14 days has attenuated demand for spot ETFs, driving the total outflow to around $3.87 billion.
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On February 25th, the Spot Bitcoin ETF saw a massive $1.14 billion spill, the largest one-day withdrawal since ETFs were introduced.
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These investment products saw a $134.3 million spill on March 6th.
Spot Bitcoin ETFS Netflows. Source: SosoValue
Alva, a company of Crypto Insights, denounced the leak on March 6th about “Trump's U.S. Crypto Strategic Reserve Proposal topic.”
” Investors are worried about decentralization. Major players like Fidelity's FBTC and ARKB are feeling the heat with big withdrawals and fears of the signaling market. ”
BTC price must hold EMA of 200 or more
On March 3, Bitcoin prices now at $85,550, fell towards the key support provided by the 200-day index moving average (EMA).
Related: Four reasons why Trump's Bitcoin Reserve is actually bullish: Cryptocratic executives
Important levels to see:
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Holding on top of this trendline, Bitcoin could recover beyond the major resistance zone between $92,800 (100-day EMA) and $94,000 (50-day EMA).
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If this occurs, the BTC price will be properly placed to retest the $100,000 level and confirm $78K as the local bottom.
BTC/USD daily chart. Source: Cointelegraph/TradingView
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So, as one day's candlestick approached under the 200-day EMA, the price of BTC was able to fall between $81,500 (LOW, March 4) and $78,200 (LOW, February 28).
Commenting on Bitcoin's price action ahead of the White House Script Summit, popular trader Derncrypt Trade pointed out key levels of viewing in both directions, including a low $90,800 range and an all-time high of $109,000.
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
