Key Points
- Bitcoin’s value dropped to $85,000, wiping out gains sparked by President Trump’s U.S. crypto reserve announcement.
- Crypto market capitalization decreased by 10%, and major coins such as Ethereum experienced double-digit losses.
Bitcoin’s value has plunged to $85,000, negating the surge experienced over the previous weekend due to anticipation around a U.S. crypto reserve. This excitement was triggered by an announcement from President Donald Trump.
On Sunday, March 2, a significant shift occurred in the crypto markets, with approximately $330 billion flowing into Bitcoin and other digital currencies. This marked one of the most substantial daily increases ever observed in the crypto world.
Market Reversal
However, the total crypto market capitalization witnessed a fall of more than 10%, plummeting to $2.9 trillion from a previous high of $3.2 trillion. Bitcoin’s 8% decline to below $85,500, coupled with a widespread market sell-off, eliminated all gains that had been stimulated by President Trump’s announcement of a multi-asset national crypto reserve.
The crypto market rally lost momentum during trading hours on Monday, March 3, as altcoin prices reverted to their levels before the weekend. Major coins like Ethereum, (XRP), Solana (SOL), and Cardano (ADA) reported double-digit losses within 24 hours.
Stock Market Impact
The stock markets were also negatively impacted. This was after President Trump reaffirmed tariffs on Canada and Mexico, set to be enforced on March 4. The Dow Jones Industrial Average and S&P 500 indices fell by 1.48% and 1.76%, while the tech-heavy Nasdaq index dropped by 2.64%.
Crypto-related stocks also faced significant selling pressure. Crypto broker Coinbase Global’s stock dropped by 4.58%, while its competitor Robinhood experienced a decrease of 6.41%. MicroStrategy’s stock performed slightly better, falling by 1.77%.
The market downturn also led to the closure of on-chain leveraged positions. According to CoinGlass, crypto liquidations surpassed $800 million in the last day, nearing the $1 billion mark. It had been previously reported that Bitcoin’s price could fall below $86,000 due to a gap in the CME BTC futures and weak demand indicated by lackluster open interest. TradingView charts now show that this gap has been closed.