Bitcoin has dropped back to $85,000, erasing the gains driven by last weekend’s U.S. crypto reserve hype following an announcement from President Donald Trump. The cryptocurrency market saw a sharp reversal after an estimated $330 billion inflow into Bitcoin and other digital assets on March 2, marking one of the most significant daily increases in the market’s history.
Market Pullback Wipes Out Gains
The total cryptocurrency market capitalization fell over 10%, dropping to $2.9 trillion from a recent high of $3.2 trillion. Bitcoin experienced an 8% decline, slipping below $85,500 during a broad market sell-off, effectively wiping out the gains attributed to Trump’s proposed national crypto reserve plan.
Altcoins also saw a sharp downturn, with major assets like Ethereum (-14.58%), XRP (-17.46%), Solana (-19.58%), and Cardano (-24.79%) posting significant double-digit losses within 24 hours. The downturn reversed the crypto market’s weekend rally, bringing prices back to pre-hype levels.
Stock Market and Crypto-Related Stocks Impacted
Traditional financial markets also faced headwinds. President Trump reaffirmed planned tariffs on Canada and Mexico, set to take effect on March 4, contributing to a downturn in the stock market. The Dow Jones Industrial Average and S&P 500 fell by 1.48% and 1.76%, respectively, while the Nasdaq saw a steeper decline of 2.64%.
Crypto-related stocks experienced selling pressure as well. Coinbase Global (NASDAQ: COIN) declined 4.58%, while Robinhood (NASDAQ: HOOD) dropped 6.41%. MicroStrategy (NASDAQ: MSTR) fared slightly better, posting a 1.77% decline.
Liquidations and Market Corrections
The crypto market downturn led to a wave of liquidations. According to CoinGlass, over $800 million worth of leveraged positions were liquidated in the past 24 hours, nearing the $1 billion mark. Analysts previously warned that Bitcoin could dip below $86,000 due to a gap in the CME BTC futures market and sluggish open interest levels. TradingView charts now indicate that the futures gap has been closed, aligning with Bitcoin’s recent price decline.
Looking Ahead
While Bitcoin’s pullback erased the surge sparked by Trump’s crypto reserve announcement, market watchers are closely monitoring future developments. The broader trend in crypto remains volatile, with macroeconomic factors, regulatory shifts, and institutional demand playing key roles in shaping price action. Investors will be watching closely for signs of renewed momentum or further downside pressure in the days ahead.
