- On Wednesday, Bitcoin, XRP, and Solana experienced declines amid a sell-off in US stocks.
- Senator Cynthia Lummis has reintroduced the BITCOIN Act in Congress, proposing the acquisition of 1 million BTC over a five-year period.
- Despite Trump’s executive orders, the SEC’s support for cryptocurrencies, and Lummis’ initiative, recovery in the crypto market remains elusive.
Bitcoin (BTC), XRP, and Solana (SOL) faced challenges on Wednesday. These leading cryptocurrencies by market cap are showing signs of weakness as risk aversion prevails in the crypto space, resulting in a notable cooling-off trend.
Three Attempts and a Downturn
Bitcoin made three attempts to close above the $100,000 threshold during the first week of February. The largest cryptocurrency opened above this significant level each day but failed to maintain it, ultimately moving lower.
More than thirty days have now passed since Bitcoin last traded above $100,000.
BTC/USDT daily price chart
Key developments, including executive actions from US President Donald Trump, plans for a Strategic Crypto Reserve, and Lummis’s proposal for the acquisition of 1 million BTC over five years, have not been sufficient to stimulate a recovery in the cryptocurrency market.
The 30-day Pearson Correlation chart for Bitcoin analyzed by TheBlock reveals a linear relationship between BTC and the S&P 500, indicating the strength and direction of their correlation. The correlation coefficient ranges from -1 to +1.
As of March 10, the metric shows a strong 0.75 correlation between Bitcoin and the S&P 500, suggesting that BTC’s price movements tend to follow the performance of US stocks closely.
Bitcoin Pearson correlation (30-day)
With the recent adjustments in the S&P 500 and Nasdaq Composite, traders in the crypto market can expect ongoing volatility in BTC’s price. As Trump’s executive orders and policies unfold, crypto assets may face additional corrections in the coming week.
In a market report released on Monday, analysts from Bitfinex indicated that Bitcoin is undergoing a sell-off due to recent macroeconomic shifts. A significant part of the recent selling pressure is attributed to traders liquidating their positions at a loss, suggesting many are capitulating.
Between February 28 and March 4, realized losses among BTC traders soared to $818 million per day, marking two of the largest days for such losses.
Typically, capitulation phases are followed by market stabilization. Nevertheless, the prevailing macroeconomic challenges and geopolitical uncertainties imply the market remains “highly reactive,” necessitating that traders closely monitor buying interest and ETF flows before making trade decisions in the upcoming weeks.
Bitcoin entity-adjusted realized loss
Senator Cynthia Lummis’ BITCOIN Act: A Plan to Acquire 1 Million Bitcoin Over Five Years
Senator Cynthia Lummis has put forth the “BITCOIN Act” again in Congress. This initiative intends to facilitate the purchase of up to 1 million BTC tokens over a five-year timeframe, alongside a requirement to hold them for a minimum of 20 years.
Lummis’ goal is to create a Strategic Bitcoin Reserve, which aligns with President Trump’s proposal for a Strategic Crypto Reserve, reflecting the ambitions of stakeholders in the US crypto landscape.
Bitcoin, XRP, and Solana Face Declines on Wednesday Amid Trading Anxiety
The Crypto Fear & Greed Index sits at 34 on a scale from 0 to 100, indicating that traders are experiencing high levels of fear, despite positive news regarding cryptocurrencies from the Trump administration. As of Wednesday, Bitcoin slid by 1.78% to a price of $81,450, having lost 6.67% of its value over the past week.
XRP is priced at $2.1488, reflecting a decrease of 1.07% for the day, while Solana is trading at $121.68, experiencing a nearly 3% loss on Wednesday.
Reflections on Bitcoin’s Past Patterns – Expert Insights
Fakhul Miah, Director of GoMining Institutional, shared his thoughts in an exclusive interview:
“The recent downturn in Bitcoin below the $80,000 mark for the second time this year signifies increasing market volatility, reaffirming its reputation as a high-risk asset.
Market value has plummeted by over $130 billion, highlighting a phase of negative capitulation where traders are selling off assets due to mounting pressures from deteriorating market sentiment. This volatility arises not only from weaknesses within the crypto market but also from broader macroeconomic pressures, including ongoing inflation and strict monetary policies.
A comparable liquidity strain linked to a strong dollar occurred in 2017 during Trump’s presidency. However, the current situation presents added complexities. Elevated Consumer Price Index (CPI) figures have sustained the Federal Reserve’s hawkish position, keeping borrowing costs high and constraining market liquidity. This environment continues to impact speculative assets such as Bitcoin, which are particularly sensitive to changes in monetary policy.”