Bitcoin fell to $80,000 over the weekend after the highly anticipated White House crypto summit failed to reassure investors. The event, which many hoped would clarify the administration’s stance on digital assets, instead left the market uncertain. The cryptocurrency market continued its downward spiral into the new week, with analysts warning of further losses ahead.
At the summit, former President Donald Trump attempted to rally support by touting a new “strategic reserve” built from the federal government’s existing Bitcoin holdings.
“The federal government is already among the largest holders of Bitcoin, as you know, really one of the largest holders in the world, with as many as 200,000 Bitcoin obtained via civil law and various other forms of law, including enforcement actions,“
Trump stated.
“These existing holdings will form the foundation of the new reserve. From this day on, America will follow the rule that every Bitcoiner knows very well: never sell your Bitcoin.“
Despite the bold proclamation, the market was unconvinced. Investors had expected a policy shift or new government acquisitions. Instead, Trump’s remarks focused primarily on regulatory frameworks, leading to disappointment among traders and institutional investors alike.
Bitcoin Faces Heavy Selling Pressure
Bitcoin’s decline over the weekend was exacerbated by a technical breakdown. The digital asset lost key support at the 200-day moving average, encouraging further selling.
Analysts pointed to a crucial support level at $79,204, which, if broken, could send Bitcoin tumbling further.
Veteran trader Peter Brandt noted a “bearish pennant pattern” forming on Bitcoin’s chart. He highlighted that Bitcoin had completed a double-top pattern near $108,100, followed by a deep retest of $95,321 before the recent breakdown. “The structure suggests more downside ahead,” Brandt warned.
Arthur Hayes, former BitMEX CEO, echoed similar sentiments.
“An ugly start to the week. Looks like $BTC will retest $78k. If it fails, $75k is next in the crosshairs,”
he wrote on social media.
He further pointed out that options open interest between $70,000 and $75,000 remains high, potentially leading to heightened volatility if Bitcoin enters that range.
Crypto analyst Ali Martinez highlighted the scale of the market turmoil, reporting that over $1 billion in Bitcoin long positions had been liquidated in a single day. “The massive liquidation highlights the intense market volatility currently impacting the cryptocurrency sector,” Martinez said.
Broader Crypto Market Under Pressure
The downturn was not limited to Bitcoin. Ethereum fell to its lowest level since November 2023, teetering near the $2,000 mark. The second-largest cryptocurrency is now down nearly 50% from its December highs. Other major cryptocurrencies, including Solana (SOL) and XRP (XRP), posted similar losses of around 7%, while Cardano (ADA) and Dogecoin (DOGE) plummeted by nearly 12%.
Institutional investors appear to be retreating from the market. Bitcoin spot ETFs saw net outflows of $799 million last week, with Fidelity’s Bitcoin ETF (FBTC) leading the exodus at $201 million in withdrawals. The outflows underscore waning confidence in Bitcoin’s near-term prospects.
CPI Data and Market Uncertainty
Adding to investor anxiety, upcoming U.S. Consumer Price Index (CPI) data could further roil markets. The inflation gauge, set for release this week, is expected to show modest progress in controlling inflation. However, a surprise uptick could push the Federal Reserve to maintain higher interest rates for longer, putting additional pressure on risk assets like Bitcoin.
“There could be a little disruption,” Trump admitted during a Fox News interview when asked about the economic impact of his policies. He likened the approach to former Federal Reserve Chair Paul Volcker’s aggressive inflation-fighting tactics in the 1980s, which led to a sharp economic contraction before a period of sustained growth.
For now, all eyes remain on Bitcoin’s ability to hold above $78,000. A break below could accelerate selling, with the next critical support at $75,000. Traders and institutional investors remain on edge, awaiting clarity from both the White House and macroeconomic indicators.
