David Edwards
Bitcoin (BTC) rebounded 4% on March 7, recovering from local lows of $84,713 as traders moved past initial disappointment over the U.S. Strategic Bitcoin Reserve, according to data from Cointelegraph Markets Pro and TradingView.
The BTC/USD dip followed an executive order from President Donald Trump, officially establishing the Bitcoin Reserve. However, the reserve will consist solely of confiscated BTC, with no new acquisitions planned.
“Premature sales of Bitcoin have already cost U.S. taxpayers over $17 billion in lost value. Now, the federal government will have a strategy to maximize its holdings,” wrote David Sacks, the White House’s crypto czar, in a post on X.
Sacks added that the Treasury and Commerce Departments have been tasked with formulating budget-neutral strategies to acquire additional Bitcoin—without imposing extra costs on taxpayers.
Market Rebounds After Initial Sell-Off
Following the announcement, Bitcoin markets initially dropped, as many traders had hoped for new government acquisitions to bolster demand.
“For what it’s worth, this is not the ‘reserve’ that crypto bulls had in mind,” noted The Kobeissi Letter on X, describing the event as a classic “sell the news” scenario.
Despite the dip, Asian trading hours saw renewed strength in BTC ahead of the White House Crypto Summit scheduled later in the day.
Analysts Remain Bullish on Bitcoin
Despite short-term volatility, seasoned analysts dismissed fears of a sustained downturn.
“I can’t recall a time when Bitcoin was more bullish, yet people still panic at the bottom,” remarked BitQuant, a popular crypto analyst.
Similarly, Charles Edwards, founder of Capriole Investments, described the market as being “excessively short” when BTC dipped below $85,000.
“Bitcoin always overreacts to news—both up and down,” he added.
Jobs Data and Fed Policy to Drive Further Volatility
The Strategic Bitcoin Reserve announcement wasn’t the only factor influencing market sentiment. Investors were also closely watching upcoming U.S. employment data and a speech from Federal Reserve Chair Jerome Powell on March 7.
Market expectations for interest rate cuts have been shifting, with the CME Group’s FedWatch Tool now pricing in only 11% odds of a cut at the March Fed meeting, though probabilities for a May rate cut have risen to nearly 50%.
With macroeconomic factors and regulatory developments at play, Bitcoin remains poised for further volatility in the coming weeks.
