Bitcoin (BTC) price plunged from $93,700 to $89,250 in under an hour on March 3, wiping out half of the previous day’s gains. The drop likely triggered panic among traders as S&P 500 index futures fell 1% following China’s announcement of retaliatory measures against the United States’ additional 10% import tariffs.
Despite the sell-off, Bitcoin’s chances of reclaiming the $90,000 support remain strong. On March 2, US President Donald Trump stated that Bitcoin and Ether (ETH) would be key components of the country’s strategic digital asset reserves. Trump also hinted that further details would be disclosed during the first government crypto summit on March 7.
Bitcoin/USD (left, orange) vs. S&P 500 futures (right). Source: TradingView/Cointelegraph
The primary driver behind Bitcoin’s price drop on March 3 was the excessive expectations fueled by Trump’s weekend posts. Investors quickly realized the bureaucratic hurdles involved, including a lengthy approval process and the need for congressional approval. Additionally, doubts remain over whether the plan would involve actual purchases of these cryptocurrencies.
Source: MetaLawMan
Aurelie Barthere, principal research analyst at blockchain analytics firm Nansen, correctly anticipated that Bitcoin’s rally to $94,500 over the weekend was unsustainable. The 21% surge from the $78,300 low on Feb. 28 appeared exaggerated to some market participants, particularly given the ongoing global tariff war and broader macroeconomic uncertainty.
China’s tariff retaliation could harm US economy; crypto reserve funding remains uncertain
China vowed to retaliate against Trump’s 10% tariff by targeting US exports, including soybeans and critical minerals like rare earths. This move could drive up food and tech costs, disrupt supply chains, and reduce rural incomes, potentially shrinking US GDP by 0.3% to 1.3%, according to economists. Hedge fund manager Anthony Scaramucci warned that if tensions escalate further, investors should brace for economic pain.
James “MetaLawMan” Murphy, a lawyer specializing in crypto legal and business issues, noted on X that even in the unlikely event that Congress swiftly approves the strategic digital asset reserve, the key question remains its funding source. Most likely, the initial approval would involve pausing government crypto asset sales—an action with limited impact on prices.
Another source of concern for Bitcoin traders came from Michael Saylor’s March 2 announcement that Strategy (formerly MicroStrategy) neither issued new shares nor increased its BTC holdings beyond 499,096 in the previous week. Despite no prior indication, some traders had expected the company to “buy the dip.”
Source: RunnerXBT
Crypto trader and analyst RunnerXBT expressed frustration over Strategy purchasing $2 billion worth of Bitcoin at an average price near $97,500 but remaining inactive as BTC dropped to the $80,000 range. His analysis also suggests that Strategy’s Bitcoin purchases above $95,000 could be a net negative for the market, as the previous instance led to only a short-lived rally.
Related: MSTR stock pops 15% following Bitcoin weekend rally
Despite worsening investor sentiment toward the global economy, Bitcoin is likely to reclaim the $90,000 support as Strategy is expected to continue accumulating BTC through its $42 billion debt and stock issuance plan. Michael Saylor has never shown an intention to time the market when adding to the company’s Bitcoin holdings, suggesting further purchases regardless of price levels.
As for the expectations surrounding the strategic crypto reserves, the timeline remains uncertain, but the long-term impact on Bitcoin’s price is likely positive. BTC was designed to thrive in environments where investors perceive excessive stock market valuations or potential real estate corrections. Given these conditions, the probability of Bitcoin surpassing $95,000 in the near future remains high.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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