Bitcoin is experiencing a sharp decline as global risk-aversion dominates the markets. However, a surprise policy change from Washington may inject new momentum in this 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.
CoinGecko reports that the cryptocurrency is currently trading at $81,600. This is down by 25 percent from its previous peak of $109,000 in January. The selling pressure has intensified as liquidity conditions have tightened.
Vincent Liu told Kronos that the daily tariff changes and ETF outflows were keeping risky assets at a premium. Decrypt. “Crypto-investors need to see a change in the macro environment before they can turn around their sentiment.”
The Data of Glassnode This chart shows how Bitcoin’s recent fall below $92,000 marks a critical inflection. The level corresponds with the Short-Term Holder cost basis—a critical support line that, when breached, often signals a shift in market sentiment.
The traders have noticed that this pullback is lacking in aggressive dip buying. This time investors are largely standing aside, as opposed to previous pullbacks which sparked new accumulation.
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.
Risk sentiment is also not helped by the broader macro background.
ASX 200 now has 10% less than its February high, and is in correctional territory. Inflation concerns, along with hawkishness from the U.S. Federal Reserve have also kept traditional markets on edge.
There are new trade tensions between China and the U.S. for investors to contend with. Although headlines from the White House offer some hope to crypto investors,
Bo Hines informed crypto leaders in a closed door roundtable that Trump’s administration plans to implement cryptocurrencies. accumulate As much Bitcoin as you can, to reinforce the commitment of the government in 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.
White House officials have indicated their support for making the reserve a law. It is still unclear, however, how these purchases will be made beyond the announcements that were already made.
Administration officials insist acquisitions will be "budget neutral," potentially relying on revalued gold certificates at the Federal Reserve to finance the plan.
Supply constraints could emerge if Washington continues to make large purchases. This would be a catalyst for price increases in the future.
Alexia Theodorou told Reuters that “Bitcoin futures continue to be in contango. It indicates relative strength of Bitcoin amid market uncertainty.” Decrypt Email a statement
The rising Bitcoin dominant ratio indicates to me that investors might be moving their capital away from altcoins, and towards Bitcoin. Bitcoin is a haven for them.
Glassnode said that without renewed interest in buying Bitcoin, it could go through a long consolidation period or a deeper correction, before stabilizing.
Marco Lim is the managing director of Solowin Holdings as well as founding partner of MaiCapital. 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.
