Bitcoin faces volatility following Trump’s crypto reserve announcement and tariff implementation. Market reactions remain mixed as traders eye the massive CME futures gap at $85,000, which is Bitcoin’s largest in history.
As of March 4, 2025, Bitcoin prices have retreated below $85,000 after weekend surges. Meanwhile, President Trump continues to champion his crypto reserve initiative ahead of the White House Crypto Summit on March 7.
1. Bitcoin Price Retraces After Weekend Surge
BTC prices plunged to $84,500 today, erasing much of the weekend’s gains. This 10% decline follows Sunday’s peak at $94,164, which was fuelled by Trump’s crypto reserve announcement.
Traders now focus on critical support levels. The $90,000-$91,000 range remains significant as a former support zone. However, the massive CME gap at $85,000 could attract further downside pressure.
Daily closes this week will determine the market’s direction. Bitcoin must reclaim the $90,000 level to resume its bullish trend.
2. Trump Tariffs Trigger Market Sell-Off
President Trump’s new tariffs have sparked significant market turmoil. The 25% duties on Mexican and Canadian imports, plus 20% on Chinese goods, took effect today.
These trade measures have cost crypto markets over $300 billion in capitalisation. Bitcoin dropped 10% while Ethereum fell 15% to $2,000 within 24 hours.
The tariffs present contradictory signals for crypto. They increase mining costs through pricier imported hardware but might be offset by Trump’s regulatory clarity promises.
Investors are moving to cash positions amid growing trade war concerns. This shift tests Bitcoin’s reputation as a potential “safe haven” asset.
3. White House Crypto Summit Generates Anticipation
Despite tariff headwinds, Trump’s weekend announcement revitalised the crypto sector briefly. He confirmed plans for a strategic crypto reserve including Bitcoin, Ethereum, XRP, Solana, and Cardano.
The March 7 White House Crypto Summit could provide crucial details about this initiative. David Sacks, White House Crypto Czar, has teased “more to come” regarding Trump’s vision.
This summit might clarify whether the reserve will use the Treasury’s $19 billion in seized crypto or require new purchases. Such information could potentially counterbalance tariff-related market concerns.
4. Fed Policy Remains in Focus
Key economic indicators may impact markets this week. Initial jobless claims arrive March 6, followed by the US jobs report and Fed Chair Powell’s speech on March 7.
Inflation worries grow as tariffs threaten to increase consumer costs. This pressure might force the Federal Reserve to maintain current interest rates longer than expected.
The CME Group’s FedWatch Tool shows just a 7% probability of a March rate cut. This represents a significant decrease from previous market expectations.
Crypto traders should watch for volatility as employment data and Powell’s remarks coincide with the Crypto Summit on March 7.
5. Market Sentiment Signals Caution
On-chain metrics show signs the market is in a bearish zone due to ongoing fear. The Coinbase Premium Index has been trending down towards negative territory, suggesting returning US demand.
Furthermore, the adjusted SOPR has fallen below 1, indicating coins are being sold at a loss following last week’s panic selling. Furthermore, today’s tariff-driven decline has dampened optimism.
The Crypto Fear & Greed Index registers 24/100, up from last week’s extreme fear reading of 20/100. However, it remains firmly in “fear” territory.
What’s Next for Bitcoin?
Bitcoin stands at a crossroads with multiple competing influences. The $85,000 CME gap looms as a potential downside target in the short term.
However, the upcoming White House Crypto Summit could dramatically shift the narrative. Traders must balance tariff concerns against potential policy breakthroughs.
President Trump’s dual role as tariff implementer and crypto advocate creates market uncertainty. His statements at the summit may determine whether institutional confidence returns to digital assets.
For now, traders should prepare for heightened volatility. The battle between macro headwinds and crypto-specific developments will likely define Bitcoin’s path through March.
Written By Fazal Ul Vahab C H
