“Sell the Fact” Crypto Reserve Sends Bitcoin Price Below Support, Eyes $80K

Bitcoin’s Bull Run Stalls After Hitting $110K

Bitcoin had an exceptional bull run in 2024, surging to a peak of $110,000 on January 20. However, a sharp sell-off followed, with BTC/USD plummeting below $80,000 by the end of the month and briefly breaking below the 200-day SMA (purple).

After Donald Trump’s announcement of a U.S. crypto reserve, which would include Bitcoin, Ethereum, Solana, Ripple (XRP), and Cardano (ADA), Bitcoin saw a strong rebound to $95,000 as the 200-day SMA held as support. However, the market reaction remained muted, as traders sought more clarity on the policy details.

Sellers Take Control, Bitcoin Falls Below $80K

Despite the initial recovery, bearish pressure quickly resumed, sending Bitcoin below the 200 SMA once again by Tuesday of last week. The majority of the gains from Trump’s crypto reserve announcement were erased, and sellers remained in control.

Each time Bitcoin attempted to reclaim the 200-day SMA, the upper moving averages acted as resistance, preventing a sustained recovery. Yesterday, Bitcoin finally broke below the 200-day SMA decisively, setting the stage for a potential drop toward $80,000 and February’s low of $78,500.

Uncertainty Over Government Bitcoin Strategy Weighs on Market

After menti0oning XRP, ADA, SOL, BTC and ETH which got markets excited, the US officials later clarified that the government was merely identifying the top five cryptocurrencies by volume and that a concrete plan was still in development. Traders, however, were left seeking further clarification.

Additionally, reports surfaced that the U.S. government intends to hold seized Bitcoin instead of selling it, a long-rumored policy shift that failed to generate much excitement among investors.

“Sell the Fact” Reaction Pushes Bitcoin Lower

Late last week, the US President signed the executive order establishing the crypto reserve, but the market responded with a classic “sell-the-fact” move. Since the announcement, Bitcoin has dropped over $3,000, reaching new lows.

The executive order leaves the door open for future government Bitcoin purchases, but such an initiative would likely require Congressional approval, making it an uncertain prospect.

According to a White House factsheet, the U.S. Treasury and Commerce Secretaries have been authorized to develop budget-neutral strategies for acquiring additional Bitcoin, provided that such strategies do not impose additional costs on American taxpayers.

Market Outlook: Will Bitcoin Find Support at $80K?

With BTC/USD  now trading below key technical levels, the $80,000 support zone will be critical in determining Bitcoin’s next move. If sellers continue to dominate, a retest of February’s low at $78,500 could be imminent. However, if buyers step in at these levels, Bitcoin may attempt another recovery—but the market will likely need clearer policy direction before sustained upside momentum returns.