Why is Bitcoin price down today?

Bitcoin’s price has faced a notable decline of over 5% in the past 24 hours, settling at $88,100. This downturn follows the recent announcement by former President Donald Trump regarding the establishment of a US Strategic Bitcoin Reserve, which has not met market expectations.

### Bitcoin Strategic Reserve Falls Short of Expectations

The recent executive order signed by Trump on March 7 to create a Strategic Bitcoin Reserve has caused ripples of concern within the cryptocurrency market. Initially, market participants anticipated that the government would allocate taxpayer funds to purchase additional Bitcoin. However, Trump’s administration indicated that the reserve would primarily consist of Bitcoin already confiscated in federal asset forfeiture cases.

The sentiment was further echoed by David Sacks, appointed as a “crypto czar,” who made it clear that the reserve would be funded solely by existing assets forfeited to the government. Sacks noted, “The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it will not cost taxpayers a dime.”

This strategy, while fiscally conservative, did little to instill confidence in traders, especially since many were expecting a more aggressive investment strategy that could elevate Bitcoin’s price. The result was an 8.7% drop from a peak of $92,790 on March 6 to as low as $84,700 the following day.

### Massive Outflows from Spot Bitcoin ETFs

Adding to the bearish sentiment, spot Bitcoin exchange-traded funds (ETFs) have experienced significant outflows, totaling around $3.87 billion over the last two weeks. The decline in Bitcoin’s price and its uncertain recovery trajectory have dampened interest in these investment vehicles.

On February 25, a record $1.14 billion was pulled from these ETFs, marking one of the largest single-day withdrawals since their inception. Further, outflows continued with an additional $134.3 million on March 6, coinciding with increased scrutiny surrounding Trump’s Cryptocurrency Strategic Reserve proposal. Alva, a crypto analytics firm, attributed these withdrawals to “jitters about decentralization,” suggesting that major players in the market are becoming increasingly risk-averse.

### Key Technical Levels for Bitcoin

Bitcoin’s recent price action has brought it close to the crucial support provided by the 200-day exponential moving average (EMA), currently around $85,550. Analysts are keeping a close watch on this level, as failing to hold above it could prompt a more profound correction toward the $81,500 to $78,200 region.

Conversely, should Bitcoin manage to maintain its position above this trend line, it may enable a recovery back to critical resistance zones between the 100-day EMA at $92,800 and the 50-day EMA at $94,000. Success at this level might set the stage for a retest of the highly coveted $100,000 mark, potentially affirming the $78,000 area as a viable bottom.

In summary, the crypto landscape is in a state of flux following Trump’s recent executive order, emphasizing the need for investors to remain vigilant amid fluctuating market dynamics. As anticipation builds ahead of a pivotal White House Crypto Summit, traders are urged to navigate these volatile waters with caution.