Market Sells The News As Trump Greenlights Strategic BTC Reserves. What Next?

Did anybody say…. Sell the news?

On March 7, President Trump signed an executive order to create a strategic Bitcoin reserve using tokens already owned by the government.

And the crowd went….mild.

Very mild, in fact. Look at how the price has reacted since.

In fact, BTC has charted five straight bearish days (as of writing), wherein the price dropped from $90,670 to $78,830 - crashing below both 90k and 80k psychological levels.

NOTE: BTC has since recovered slight above $80k

So, what was the main issue? The market was disappointed by the fact that the government will not be looking to buy any new BTC. However, the government has kept open the possibility of buying bitcoin in the future, provided it imposes “no incremental costs on American taxpayers.”

Studying The Decline: WTF Happened?

This recent volatility was exacerbated by a massive $3 billion expiration in Bitcoin and Ethereum options contracts. Options realized volatility surged to above 80%, indicative of heightened market uncertainty and reactionary trading behavior. Implied volatility, a gauge of expected market fluctuations, rose sharply ahead of the White House summit, highlighting traders’ hedging activities against potential market shocks.

One key indicator, Bitcoin's Spent Output Profit Ratio (SOPR), dipped below 1.0 for the first time since October 2024, suggesting substantial distress selling and signaling capitulation among new market entrants. 

Short-term holder SOPR dropped to 0.95, its second-largest negative print in the current cycle, further indicating severe distress selling among recent investors.

On-chain data supports this picture of market distress, showing that daily realized losses across market participants reached $818 million, with two notable single-day loss events occurring in late February and early March. 

Historically, such widespread capitulation tends to precede market stabilization; however, ongoing geopolitical and macroeconomic uncertainties pose challenges for any immediate recovery.

Macroeconomic signals remain mixed, adding to market indecision. 

Although the US labor market remains resilient, with February employment growth at 151,000 jobs, unemployment rose to 4.1%. As per speculators, most of these layoffs are happening in government offices due to DOGE.

Wage growth continues at a strong pace, yet inflationary pressures from rising labor costs and restrictive immigration policies pose risks to the anticipated Federal Reserve interest rate cuts.

Further complicating the macroeconomic environment, the US manufacturing sector faces increasing instability due to new tariffs, higher production costs, and supply chain disruptions. New orders have slowed sharply, indicating possible future weakness in manufacturing growth. 

Strategy Still Plans To Buy More BTC

Did you really think the market tanking was going to deter Strategy from hoarding more BTC?

The company is actually announcing plans to raise up to $21 billion through the issuance of its 8.00% Series A Perpetual Strike Preferred Stock (STRK). These shares will gradually be sold over time via an at-the-market program managed by major financial institutions, including TD Securities, Barclays Capital, and Cantor Fitzgerald. 

The capital raised will be used to purchase more Bitcoin.

Let’s put things into perspective. Strategy currently holds a whopping 499,096 $BTC($40.9B), with an average buying price of $66,357.

In other words. Strategy owns almost a quarter of bitcoins that will ever exist.

Meanwhile, Michael Saylor, Strategy’s co-founder also attended the White House Digital Assets Summit. He emphasized the economic potential of cryptocurrencies, projecting that clear regulations could unlock up to $100 trillion in value over the next decade. 

Closing Notes

There are two schools of thought here:

1. Either the bottom is in and we are in a mini-bearish run of a mostly bullish rally.

2. Or, the downfall has begun.

It is still too early to say which way the market will move. So, how can you make winning trades instead of blind bets?

Join The Coiners now—get exclusive insights directly from expert traders, maximize your profits, and start trading with confidence.