Key Points
- Bitcoin’s price fell by 11% after Trump’s executive order to use confiscated BTC for reserves.
- Further price drops could be influenced by macroeconomic pressures and bearish technical signals.
Following an executive order by Donald Trump to utilize Bitcoin (BTC) seized from criminal activities for the strategic reserve, the price of Bitcoin fell by 11% over the weekend.
This decision came as a surprise, as the market had opened strong at $90,000 on March 7, but by March 9, the value had decreased to $80,751.
Market Reaction and Macroeconomic Pressures
The market’s reaction may have been due to unrealistic expectations, as many thought the government would purchase BTC, injecting more money into the market.
However, the order did not completely rule out future Bitcoin purchases. They would need to be “budget-neutral,” without placing a burden on taxpayers.
In addition to the reserve-related disappointments, Bitcoin’s price continues to face pressure from macroeconomic concerns, primarily related to tariffs.
The trade war between the U.S. and China is escalating, with Beijing imposing tariffs on certain U.S. agricultural goods in response to Trump’s recent increase in Chinese import duties.
Furthermore, Federal Reserve Chairman Jerome Powell confirmed that the central bank will adopt a wait-and-see approach to interest rates, following a weak U.S. nonfarm payrolls report and expectations of at least three Fed rate cuts this year.
Technical Signals and Future Predictions
On the technical side, chart analyst Peter Brandt highlighted that the Bitcoin price completed a double top pattern, with peaks at around $108,100.
After peaking, it broke down below key support near 95,321–96,659. The price formed a bearish pennant, which retested the breakdown zone but failed to reclaim it.
If the price falls below this level, it could trigger around $1.3 billion in leveraged long liquidations, causing strong downward pressure on the price.
Arthur Hayes’s recent analysis suggests that Bitcoin is likely to retest the $78k level, and if that fails to hold, $75k could be the next target.
Despite the recent downturn, some experts believe that the Bitcoin reserve news is bullish in the long term.
The market’s reaction to the news of the reserve consisting of forfeited BTC was the result of inflated expectations, according to Matt Hougan, a chief investment officer at Bitwise Asset Management.
Another positive development is that wallets holding over Bitcoin have cumulatively accumulated almost 5000 BCT since March 3, according to Santiment.
Although the prices have not yet reflected this, if whales continue to accumulate, the second half of March may be better than the “bloodbath” that the market has seen since BTC reached its new $100K peak 7 weeks ago.