Crypto Market Crash: BTC Drops Below $83k After Strategic Reserve Announcement

Bitcoin’s drop from above $90k to $83k in the last 24 hours created fear among investors. Yesterday, the crypto market exhibited impressive rallies backed by Donald Trump’s announcement of a strategic crypto reserve. This decision pushed the market capitalization above $3 trillion, and BTC surged past $90k, igniting the optimistic ideology in the digital world ahead of the White House Crypto Summit on March 7.

However, the uptrend was short-lived when the global market entered a significant decline mode. Bitcoin lost most of its accumulated gains and other altcoins including ETH, XRP, Solana, and Cardano, crashed by double digits.

Meanwhile, during the time, investors’ interest were directed towards altcoins, signaling an increase in capital inflow.

Bitcoin Falls Below 50% Dominance

Despite Bitcoin’s price jump, its dominance (BTC.D) dropped from 55.4% to under 50%, signaling increased capital inflows into altcoins. Historically, declines in BTC dominance have preceded strong rallies in alternative cryptocurrencies, leading analysts to anticipate a bullish phase for altcoins.

Trump’s confirmation that the “Crypto Strategic Reserve” would include Ripple (XRP), Solana (SOL), and Cardano (ADA) triggered a surge in these assets as investors adjusted their portfolios. While some celebrated the diversification, others argued that Bitcoin should be the sole reserve asset. In response to the criticism, Trump later clarified on Truth Social that Bitcoin and Ethereum would be the primary holdings, with selected altcoins as secondary assets.

Truth Social Media

Altcoins Rally, Then Pull Back

The market reacted strongly to the news. Bitcoin jumped 9.44%, posting its biggest daily gain since the post-election rally. XRP soared 34.13%, while Cardano (ADA) saw a record-breaking 72.15% single-day surge, reclaiming the $1 mark. However, altcoins failed to sustain their gains as volatility increased.

Bitcoin dominance rebounded quickly, rising to 61.44% as XRP, ADA, and SOL retraced over 10%. Many altcoins struggled to confirm key resistance levels as new support, leading to profit-taking among traders. Meanwhile, Bitcoin maintained its position above $90,000, correcting only 2% from its intraday peak. Despite the rally, analysts believe that BTC needs to hold above $88,000 to confirm a continued uptrend.

Market Remains Divided on Strategic Reserve

Adding altcoins to the U.S. reserve has sparked controversy in the crypto community. Some think this is a shrewd strategy to introduce liquidity and support a well-balanced crypto ecosystem. While others are concerned that it may be a ploy to manipulate market trends.

The sudden upswing and then downswing of altcoins after the announcement has raised concerns about speculative trading. As Bitcoin’s share increases by 1.75%, some analysts believe that investors will revert to BTC once they realize short-term gains from altcoins.

While the market waits with bated breath for more news, Bitcoin remains in the limelight. If BTC remains firm above $88,000, it could attract new investments However, the current scenario does not match with the expectation as BTC dropped to $83k. 

The White House Crypto Summit on March 7 will likely provide more clarity on the U.S. government’s long-term perspectives on digital assets. For now, the crypto market remains highly volatile, with investors watching Bitcoin’s next move closely.