Bitcoin price prediction: BTC drops 7% as U.S. unveils strategic Bitcoin reserve
Bitcoin fell by 7%
Bitcoin price action remains under pressure, struggling to hold positive momentum in March against a broader downtrend that has persisted since January. The market reacted negatively to the U.S. government's announcement of a Strategic Bitcoin Reserve, with Bitcoin dropping over 7% following the news.
The U.S. government’s move to establish a Strategic Bitcoin Reserve caught the market off guard. The reserve will be capitalized with approximately 200,000 BTC, which the government holds through criminal and civil asset forfeitures. White House crypto czar David Sacks emphasized that the Bitcoin in the reserve will not be sold but instead maintained as a store of value, akin to a digital Fort Knox.
Bitcoin price dynamics (Nov 2024 - March 2025). Source: TradingView.
Despite the long-term implications of such a reserve, the immediate reaction from the market was negative, with Bitcoin shedding more than 7% since the announcement. Traders may be interpreting the move as a signal of increased government intervention in the crypto space, adding to market uncertainty.
Bitcoin price outlook: RSI signals sustained selling pressure
Nevertheless, Bitcoin has maintained a trading range between $84,400 and $95,000 since the beginning of March. However, price action over the past six days has remained largely contained above the March opening price of $84,400. During today’s Asian session, Bitcoin declined sharply by 6% to touch this support level before rebounding to $88,400 in the early European session.
Technically, selling pressure remains dominant, as the daily RSI remains in bearish territory, reinforcing the downtrend. The 4-hour RSI has also turned lower, increasing the likelihood of a retest of the $84,400 support level.
With Bitcoin struggling below $95,000 and bearish RSI readings, the key downside level to monitor remains $84,400. A break below this support could open the door for further declines. On the upside, any sustained recovery would require a break above the $95,000 level to signal a potential shift in momentum but for now, Bitcoin remains vulnerable to further losses.
Bitcoin rose 2% as traders positioned ahead of the White House Crypto Summit. The price briefly touched the 100-day EMA at $92,850 before pulling back to retest $91,500 as support.
