Bitcoin’s sharp pullback is deepening as risk aversion grips global markets, yet a surprising policy shift from Washington could inject fresh momentum into the digital asset.
The U.S. government is reportedly seeking to expand its Bitcoin holdings, a move that—if executed—could alter the supply dynamics of an already tightening market.
The crypto is now trading near $81,600, down 25% from its January peak of $109,000, with selling pressure intensifying as liquidity conditions tighten, according to CoinGecko.
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Bitcoin traders are increasingly hedging against a potential downturn, a sign of growing caution as broader financial markets retreat ahead of key U.S. economic data. The options market—where investors buy contracts to bet on or protect against future price moves—shows traders are positioning defensively. According to Nick Forster, founder of onchain derivatives platform Derive.xyz, demand for protective contracts has risen, particularly for so-called put options, which give holders the right t...
“Daily tariff swings and ongoing ETF outflows are keeping risk assets under pressure,” Vincent Liu, Chief Investment Officer at Kronos Research, told Decrypt. “Crypto investors need a real shift in macro conditions to turn sentiment around.”
Data from Glassnode shows that Bitcoin’s recent slide below $92,000 marked a key inflection point. The level corresponds with the Short-Term Holder cost basis—a critical support line that, when breached, often signals a shift in market sentiment.
Traders have taken note of what is missing from this drawdown: aggressive dip-buying. Unlike previous pullbacks that sparked renewed accumulation, this time, investors have largely stepped aside.
According to Glassnode’s Crypto Balance Distribution heatmap, demand has softened as external risks—including the Bybit hack and escalating U.S. tariff disputes—have driven capital preservation over opportunistic buying.
The broader macro backdrop isn’t helping risk sentiment either.
The ASX 200 has slipped into correction territory, now 10% off its February peak, while inflation concerns and U.S. Federal Reserve hawkishness have kept traditional markets under pressure.
Bitcoin, Ethereum Prices Extend Losses as Stocks Sag—What’s Next for Markets?
Wall Street slid Monday as investors braced for key inflation data and reassessed Federal Reserve policy, while crypto remained under pressure despite a string of positive regulatory developments. Rising trade tensions and concerns over inflation are adding to the risk-off sentiment, with Bitcoin and Ethereum falling alongside equities. The S&P 500 dropped 2.6%, the Nasdaq-100 lost 3.1%, and the Dow Jones Industrial Average declined 2.2%, as traders moved to the sidelines ahead of this week’s i...
Investors are also contending with fresh trade tensions between the U.S. and China. Still, headlines stemming from the White House are offering crypto investors some hope.
At a closed-door roundtable earlier this week, White House official Bo Hines told crypto industry leaders that the Trump administration intends to accumulate as much Bitcoin as possible, reinforcing the government’s commitment to its recent Bitcoin reserve announcement.
It also comes as Senator Cynthia Lummis reintroduces the Bitcoin Act, a bill that would require the U.S. government to acquire up to one million BTC—worth roughly $80 billion at current prices.
The White House has signaled support for enshrining the reserve into law, though it remains unclear how the purchases would be executed beyond what’s already been announced.
Why Are Bitcoin, Ethereum Prices Falling?
The crypto market continues to bleed as traders reassess the impact of trade tensions on global economic activity and President Donald Trump’s Bitcoin Reserve order. Bitcoin has dipped 4.8% to $81,729 while Ethereum is down 8%, hovering just above November 2023 prices near $2,000. Dogecoin leads losses among the top 10 cryptos, down about 13% to $0.16. That’s despite Trump signing an Executive Order on Thursday, officially establishing the Strategic Bitcoin Reserve and authorizing the creation o...
Administration officials insist acquisitions will be "budget neutral," potentially relying on revalued gold certificates at the Federal Reserve to finance the plan.
If Washington moves forward with large-scale purchases, supply constraints may emerge, adding a fundamental catalyst for future price appreciation.
“Bitcoin’s futures remain in contango, suggesting relative strength in Bitcoin amid broader market uncertainty,” Alexia Theodorou, Kraken’s head of derivatives, told Decrypt in an emailed statement.
“The rising Bitcoin dominance ratio further indicates that some investors may be rotating capital out of altcoins and into Bitcoin as a safe haven,” he added.
Still, without renewed buying interest, Bitcoin could enter a prolonged consolidation or deeper correction before stabilizing, Glassnode wrote.
“Whether the two priced-in potential rate cuts will happen this year is a major macro concern,” Marco Lim, managing director at Solowin Holdings and founding partner of MaiCapital, told Decrypt.
“Although CPI came in better than expected, leading to a bounce in crypto and U.S. equities, most of Trump's impact on crypto seems to have already been priced in,” he added.
