The cryptocurrency market has just taken an unexpected hit. Bitcoin (BTC), which had surged past $90,000 earlier in the day, suddenly dropped to $85,783, losing nearly 4% in just a few hours. What caused this negative reaction? None other than Donald Trump’s executive order to create a Strategic Bitcoin Reserve.
However, before getting excited about the U.S. government officially supporting Bitcoin as a strategic asset, there’s a key disappointing detail: the government will not purchase BTC but will only store confiscated cryptocurrencies from legal proceedings.
📜 Trump and the “Strategic Bitcoin Reserve”
On March 7, David Sacks, the White House’s director of virtual asset policy, announced on X (formerly Twitter) that President Donald Trump had signed an executive order to establish a Strategic Bitcoin Reserve.
However, this reserve does not mean the U.S. government is actively buying Bitcoin. Instead, it will be composed solely of BTC seized in criminal and civil asset forfeiture cases.
🔍 Why Did the Market Expect More?
The idea of Bitcoin being recognized as a strategic asset by the U.S. government was enough to fuel bullish sentiment. Many traders speculated that the Trump administration might start accumulating BTC, similar to El Salvador, which has made Bitcoin part of its national reserves.
But once it was confirmed that the reserve would only consist of confiscated BTC, market enthusiasm quickly faded. This means no new buying pressure, as the government will simply manage the 200,000 BTC it already holds.
📉 Bitcoin Drops Sharply After the Announcement
Initial excitement pushed BTC above $90,000, but after the official announcement, heavy sell-offs hit the market, driving the price down to $85,783.
🔥 Key Bitcoin Price Levels to Watch
📈 Rebound Zone – $89,000+:
If BTC manages to recover this level, we could see some relief and a push toward $92,000 or higher.
⚠️ Correction or Beginning of a Major Crash?
The crypto market has seen extreme volatility in recent weeks, and this news might have been the perfect excuse for massive profit-taking. If BTC fails to hold above $86,500, the market could enter a short-term bearish phase.
💡 Buying the Dip or Preparing for a Bigger Crash?
Traders and analysts remain divided:
👉 Bullish traders see this drop as a buying opportunity, arguing that Bitcoin’s long-term macroeconomic outlook remains strong.
👉 Bearish traders believe this disappointment could be the start of a larger correction, especially if the Federal Reserve’s policies and economic conditions apply further pressure.
📊 Is this the right time to buy the dip, or are we on the verge of an even bigger BTC crash?
