Bitcoin Defies Expectations: 4% Bounce After Strategic Reserve ‘Sell the News’ Event

On March 7, Bitcoin (BTC) saw a 4% rise as investors moved past some initial disappointment regarding the US Strategic Bitcoin Reserve announcement.

Data from Cointelegraph Markets Pro and TradingView revealed that BTC/USD bounced back from a low of $84,713 on Bitstamp.

This drop coincided with President Trump signing an executive order that established the reserve. Notably, the reserve won’t consist of newly acquired Bitcoin; it will only use confiscated coins.

David Sacks, the White House crypto czar, pointed out that “premature sales of Bitcoin have already cost US taxpayers over $17 billion in missed value.” He emphasized that the government aims to manage its holdings more effectively.

“The Secretaries of Treasury and Commerce can create budget-neutral plans for buying more Bitcoin, with no extra costs to taxpayers.”

Initially, the markets reacted negatively to the news, as many investors found the reserve’s structure disappointing. The Kobeissi Letter, a trading resource, noted that the market’s reaction was a typical case of selling news when anticipation didn’t match reality.

Yet, in the Asian trading session that followed, Bitcoin regained some strength ahead of a White House Crypto Summit. Observers in the crypto industry remained optimistic about the government’s overall stance on digital currencies.

Analyst BitQuant expressed confusion over the mixed responses to these developments, stating, “I can’t recall a time when Bitcoin was more bullish, yet they still manage to manipulate you into panicking at the bottom.”

Charles Edwards of Capriole Investments mentioned that the market was “excessively short” at prices below $85,000. He added that Bitcoin tends to react strongly to news, both positively and negatively.

But Bitcoin’s price action wasn’t the only thing on traders’ minds that day. More potential volatility was on the horizon with new US employment data and a speech from Jerome Powell, the Federal Reserve chair.

After the Fed’s inflation measures met expectations the previous week, there was growing speculation about interest rate cuts later in the year. According to the CME Group’s FedWatch Tool, the chance of a rate cut in March was around 11%, while the odds for May were nearly 50%.

As markets adjust to these developments, it remains a pivotal time for Bitcoin and the cryptocurrency landscape overall.

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