Thought of the week

The exaggerated expectations for the global financial markets, including digital assets, are currently leading to cyclical weakness. Due to the uncertainties on a geopolitical level and Trump's “vague” behavior, investments are currently being held back by institutional investors, causing prices to fall slightly. The medium-term fundamental trend remains very positive. Increased buying volumes will then also subsequently boost prices again.

Digital Asset News

US President Donald Trump recently signed an executive order that provides for the creation of a strategic reserve for cryptocurrencies. This reserve is to be a kind of “Digital Fort Knox” and will include not only Bitcoin (BTC), but also other altcoins such as Ethereum (ETH), XRP, Solana (SOL) and Cardano (ADA). The aim is to position the US as a leading nation in the crypto sector and to compete with China in this area in particular. The reserve is to consist of cryptocurrencies that have come into the possession of the USA through confiscation. An important aspect of the US government's strategy is geopolitical competition with China. China remains one of the largest holders of Bitcoin in the world, and many fear that the US could lose out in this regard. According to various estimates, China could hold up to 194,000 Bitcoin.

Samson Mow, the CEO of JAN3 and a popular Bitcoin expert, recently commented on the US government's plans, stating that the creation of a strategic Bitcoin reserve is part of the “real race” for national Bitcoin adoption. The widespread disappointment following the announcement of the introduction of a strategic Bitcoin reserve in the US - which was nonetheless hailed as a historic step for Bitcoin adoption - points to unrealistic expectations in the industry, according to experts.

On March 7, President Donald Trump signed an executive order to this effect, which initially states that only Bitcoin confiscated in federal criminal proceedings will be deposited instead of buying additional BTC on the market. The announcement caused the Bitcoin price to plummet by over 8% due to this detail, as the data shows. As Anastasija Plotnikova, co-founder and CEO of Fideum, a crypto company for regulation and blockchain infrastructure, explains, this reaction reveals unrealistic expectations from the industry.

“It was very clear from the beginning that the US government could only use the existing BTC in its possession, i.e. seized funds,” she told Cointelegraph, adding:
“It's bizarre to see such a huge public disappointment communicated by some industry players. [...] Not too long ago, the very idea of a BTC reserve run and backed by a federal government was a revolutionary idea, and now we're getting a very solid implementation.”

US President Donald Trump's executive order establishing a strategic Bitcoin reserve calls for a cost-neutral strategy to acquire more coins, which includes adding more BTC through the seizure of cryptocurrencies and the possible conversion of other reserves.

The US government maintains strategic reserves for a range of assets and commodities, including gold, oil, natural gas, foreign exchange, pharmaceuticals, land, key rare earths and even cheese.
The most liquid of these strategic reserves are oil, gold and foreign exchange.
According to the U.S. Department of Energy, as of Feb. 28, the U.S. Strategic Petroleum Reserve held about 395 million barrels of crude oil, for a total capacity of more than 713 million barrels.
Lummis had previously argued that the US Treasury should convert some of its assets to buy BTC, but without specifying which assets specifically should be converted.
White House crypto envoy David Sacks recently referred to Bitcoin as digital gold and the recently established Bitcoin Strategic Reserve accordingly as a “digital Fort Knox” for the supply-constrained, decentralized cryptocurrency.

Sacks added that BTC's scarcity sets it apart from other cryptocurrencies as a unique store of value.

Digital Asset Market

Market review and outlook

The majority of digital assets experienced setbacks last week, confirming once again the cyclical weakness of the market. Bitcoin now ranks just above half the support level of ~$80,000, underpinning the currently prevailing correction phase. Altcoins also suffered price setbacks and thus followed in correlation with Bitcoin in terms of price changes. The global financial markets also suffered a negative week, as geopolitical tensions are on the rise and the uncertainties currently being driven by Trump are not conducive to investment in the markets. The eagerly awaited “Crypto Summit” at the White House, in which some market participants had high hopes, turned out to be a boring event that was not conducive to the market in the short term and received poor reviews in the international press. The price movements after the summit were correspondingly negative and made for a very negative weekend. The medium-term outlook remains positive, while the short-term view appears very unclear, which could support the slightly negative market sentiment.

Chart technology

From a chart technical perspective, Bitcoin is once again trading at the previously formed support level around $80,000. In the past week, Bitcoin lost more than 10% of its value, which means that this price region, where Bitcoin is currently trading, is seen as immensely important for maintaining the current trend and building cyclical positivity. The current trend channel serves as a medium-term support level if it is not lost to the downside. Institutional investment will decide whether a renewed market upswing can be achieved or whether cyclical weakness will continue to dominate the markets.

The next upside price targets: ~$87,000, ~$90,000 ~$95,500

The next price targets in case of a negative development: ~$80,000, ~$78,000 ~$73,000

Trading idea

Swing trades after clear support declines and trend declines could represent lucrative entries in the medium term.