Bitcoin falls back to $84,000, giving up the ‘Trump pump’ after crypto-reserve posts

On the morning of March 4, bitcoin slipped back below $84,000. Similar levels were seen over the weekend before Donald Trump called to “give the go-ahead” to a strategic cryptocurrency reserve.

On March 2, the US president instructed that SOL, XRP and ADA be included in the reserve’s composition alongside bitcoin and Ethereum. Against that backdrop, bitcoin’s price surged to $95,000, while the cited altcoins posted double-digit gains.

The renewed about-face in sentiment may have stemmed from a lack of “coordination” and details on funding the plan, TD Cowen believes, writes The Block.

“We warn against overreacting. In the initial version, bitcoin and ether were not even included in the reserve. That leads us to think the move was not coordinated. Nor was it discussed how the government would obtain funds to buy tokens,” the note said.

Analysts also flagged the March 7 summit with the president’s special adviser on AI and cryptocurrencies David Sacks alongside industry representatives and investors.

The event will help determine the prospects for legislation on stablecoins and digital assets. TD Cowen doubted Congress’s readiness to enact such initiatives within the first 100 days of Trump’s presidency.

Aurelie Barthere of Nansen linked the rally’s short-lived nature to the lengthy process of securing Congressional approval of the reserve’s structure.

Her colleague Nikolai Sondergaard warned of volatility given the uncertainty around the crypto reserve.

“The question for the future is whether any of this will come to pass. If not, that will most likely be negative news for coin prices,” the expert added.

Are trade wars to blame?

On the evening of March 3, the situation in crypto markets was aggravated by reports of a new round of White House tariff increases. Selling intensified across risk assets; the S&P 500 index closed down 1.8%.

From March 4, 25% tariffs take effect on goods from Mexico and Canada (10% on energy), and 20% on imports from China. Trump justified the move by saying neighbouring countries had not halted the flow of fentanyl into the US.

Canada’s prime minister, Justin Trudeau, warned he would impose reciprocal measures on American goods and urged the White House to reconsider. Mexico promised to present “its plan B, C, D” later. A response from official Beijing is also expected. 

Investors are also bracing for additional steps after April, when Commerce Secretary Howard Lutnick will present a report on possibly introducing US “reciprocal tariffs” to align them with other countries’ levels and offset other trade barriers, which could hit the EU hard.

On-chain picture

According to Glassnode, the early-week rally did not push short-term holders’ coin purchases into profit. At the then-prevailing price of $92,700, their “profitability” slipped negative, pointing to a “fragile position”.

#Bitcoin’s Accumulation Trend Score has remained below 0.5 for 58 consecutive days, marking an extended period of net distribution. The current streak is approaching the average duration for distribution periods over 1Y window, suggesting it remains in line with prior trends. pic.twitter.com/f8HbLllogN

— glassnode (@glassnode) March 3, 2025

Specialists also noted that the Accumulation Trend Score for the first cryptocurrency stayed below 0.5 for 58 straight days, signalling a prolonged period of net distribution. Such phases often coincide with market corrections.

“Accumulation and distribution phases alternate on average over 57–65 days. The latest reading is 0.9. This suggests that large players are still in net-selling mode, and a shift to accumulation has yet to be confirmed,” they warned.

IntoTheBlock noted a “turning point” after the number of active bitcoin addresses hit a three-month high. The firm saw this as a signal of impending “capitulation”.

Bitcoin’s active address count reached its highest daily level since December 2024, potentially signaling a capitulation moment.

Historically, spikes in on-chain activity have often coincided with market peaks and bottoms—driven by panic sellers exiting and opportunistic… pic.twitter.com/m00G7PfquJ

— IntoTheBlock (@intotheblock) February 28, 2025

“Historically, spikes in on-chain activity have often coincided with market peaks and bottoms,” the specialists noted.

According to Sygnum, a $1bn purchase of the first cryptocurrency for a national bitcoin reserve would lift market capitalisation by $20bn.

Earlier, analyst Thomas Farrer forecast that the price of the digital gold would jump by $50,000 in a minute when US authorities confirm the creation of SBR.