Bitcoin Price Volatility and Trump’s Crypto Moves: An Epic Saga Explained

Bitcoin’s price took a steep dive, dropping below $84,000 as the market reacts to U.S. President Donald Trump’s latest crypto-related announcement. Price action quickly rebounded making its way back up, but the gains seem short-term.

The sharp decline wiped out nearly $980 million in leveraged positions, marking one of the largest single-day liquidation events in recent months.

$980 Million Wiped as Bitcoin Price Collapses Below $84K

Bitcoin’s rally over the weekend came to an abrupt halt on Monday, with the price plunging more than 8% to close at $86,220. The sell-off extended into Tuesday, dragging BTC down to $83,900 and erasing most of the recent gains fueled by Trump’s Crypto Strategic Reserve announcement.

According to Coinglass data, over 289,815 traders saw their leveraged positions liquidated, amounting to a total of $978.62 million in the past 24 hours. The largest single liquidation occurred on Bitfinex under the tBTCF0:USTF0 trading pair, valued at $13.40 million.

Market analysts attribute this sudden downturn to a classic “buy the rumor, sell the news” reaction following Trump’s Sunday announcement. The revelation initially triggered a surge, but traders quickly turned bearish, cashing in on profits and intensifying the downward momentum.

Trump’s Crypto Strategy Faces Backlash, Schiff Calls It a “Rug Pull”

The unexpected inclusion of Ripple (XRP), Solana (SOL), and Cardano (ADA) in Trump’s Crypto Strategic Reserve has created a divide within the crypto community. While some saw it as a positive move, others questioned the selection criteria, leading to skepticism and a fading bullish sentiment.

Adding to the controversy, economist Peter Schiff accused Trump of orchestrating a crypto rug pull via his Truth Social posts.

In a Tuesday X post, Schiff called for a Congressional investigation, alleging that Trump’s social media activity artificially pumped Bitcoin’s price, allowing whales to exit at inflated levels. He also questioned whether insiders had prior knowledge of the announcement, implying a coordinated pump-and-dump scheme.

ETF Outflows Signal Institutional Exit as Bitcoin Faces Headwinds

Institutional demand for Bitcoin is also waning, with Coinglass data showing a $74.20 million outflow from Bitcoin spot ETFs on Monday. This follows a brutal week where Bitcoin ETFs recorded $2.39 billion in net outflows, suggesting institutional investors are taking a risk-off approach.

Total Bitcoin spot ETF net inflow chart. Source: Coinglass

If the outflow trend persists, Bitcoin could struggle to regain lost ground. In a Tuesday report, QCP Capital analysts warned that Trump’s renewed stance on trade tariffs against Canada, Mexico, and China could further dampen investor sentiment.

They noted that the U.S. Securities and Exchange Commission’s (SEC) decision to pause crypto enforcement cases failed to stem the decline, reinforcing concerns over macroeconomic headwinds.

Fear & Greed Index Dives Back Into Extreme Fear

The Crypto Fear & Greed Index has plunged back into “Extreme Fear” territory following Bitcoin’s latest correction. The index, which measures market sentiment on a scale of 0-100, currently stands at 15, down from 33 just a day ago.

Extreme fear levels have historically marked local bottoms, but analysts remain cautious. Rekt Capital, a well-followed crypto trader, suggested that while Bitcoin may stabilize around $93,500, another “downside deviation” may still occur before a true recovery can begin.

Meanwhile, Axel Adler, another crypto analyst, highlighted in a March 4 X post that Bitcoin’s bounce from $81,000 was a positive sign. However, others, including MN Trading’s Michaël van de Poppe, argue that Bitcoin will likely remain volatile until macro events, such as the U.S. Consumer Price Index (CPI) report on March 12, provide clearer direction.

With Bitcoin struggling to regain momentum, traders are now eyeing key technical levels for signs of stability. Analysts at Bitfinex caution that reclaiming $94,000 could be challenging due to mounting resistance.