- Bitcoin’s (BTC/USD) price experienced significant volatility, dropping to $78k before rising to $95,000 due to Trump’s cryptocurrency reserve comments, then settling around $86k.
- Open interest for Bitcoin is at a six-month low, which historically has preceded price jumps.
- Spot Bitcoin ETF flows saw a $94.3 million investment on the last day of February, ending a period of significant withdrawals. Can it continue?
- Technical analysis indicates a potential downtrend for BTC/USD.
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Bitcoin’s rollercoaster ride continued today with the world’s largest cryptocurrency rising about 18% since Friday’s low. The gains proved short-lived however, as Bitcoin surrendered half of those gains to trade back at $86k at the time of writing.
Crypto Heatmap, March 3, 2025
Source: TradingView (click to enlarge)
President Trump and the Crypto Reserve
Bitcoin’s price surged by 11%, reaching almost $95,000, after U.S. President Donald Trump mentioned on March 2 the idea of creating a strategic cryptocurrency reserve.
Initially, he said it would include XRP, Solana, and Cardano, but later added on his Truth Social platform that it would also include Bitcoin, Ether, and other cryptocurrencies.
The move followed a rise of 2% on March 1 and a recovery in price on Friday 28 from lows of 78197 to close almost flat at 84321.
Trump’s post gave crypto a positive push, but bigger issues like tariffs still play a big role for traders. Cryptocurrencies are still affected by overall economic conditions and that was reflected by price action today as tariff uncertainty and geopolitics continue to dominate.
There are concerns around President Trump’s plans as according to James “MetaLawMan” Murphy, a lawyer focused on crypto issues, he does not believe a strategic digital asset reserve can be established by executive order.
Murphy went further and pointed out on X that even if Congress quickly approves the strategic digital asset reserve which is unlikely, the main question is how it will be funded. Most likely, the plan would start by stopping government sales of crypto assets, which would have only a small effect on prices.
The question in the short-term is whether Friday’s lows around $78k handle serve as a floor for another push toward $100k, or crumble as overall market sentiment remains one of caution.
ETF Flows
Spot Bitcoin ETFs in the U.S. saw $94.3 million in investments on the last day of February, marking the end of crypto’s toughest month in three years.
This amount ended an eight-day period of withdrawals when investors took out more than $3.2 billion from these funds as crypto prices dropped.
The new week will be pivotal for ETF flows as it will be interesting to see if ETF flows improve following the crypto reserve comments by President Trump over the weekend.
Source: Farside Investors (click to enlarge)
Bitcoins Open Interest Paints a Positive Picture
CrediBULL Crypto shared on X that Bitcoin’s open interest is now at its lowest point in six months. He mentioned that the last time it was this low, Bitcoin’s price was between $50,000 and $60,000. He also pointed out that Bitcoin’s funding rate has turned negative, which is the same thing that happened before Bitcoin’s price jumped to $100,000 when it was trading in the $50,000-$60,000 range.
Interestingly, he stated that these signals look “fantastic” for Bitcoin and support his belief that it has hit a bottom. This seems true, as Bitcoin has bounced back to $95,000 after dropping below $80,000 last week.
Source: ‘CrediBULL Crypto’ on X (click to enlarge)
Technical Analysis BTC/USD
Bitcoin (BTC/USD) from a technical standpoint on the daily timeframe remain in a downtrend despite the weekend rally.
The failure of the daily candle to close above the 96572 handle leaves BTC/USD vulnerable to further downside.
There is also a death cross formation as the 50-day MA crosses below the 100-day MA which usually hints at further downside potential.
Bitcoin (BTC/USD) Daily Chart, March 3, 2025
Source: TradingView.com (click to enlarge)
Dropping down to a two-hour chart and the inverse head and shoulders pattern that formed over last week with a break occurring over the weekend has played out to perfection.
The target was around the 95000 handle which has also been fulfilled and preceded a significant pullback on Monday.
The concern part is that the bullish rally has not just faded but a candle close below the previous swing low at 85600 means we have had a shift in structure favoring bears at this stage.
There is also the 50 and 100-day MAs both of which will provide significant resistance hurdles should bulls look to make a move once more.
Immediate resistance rests at 86567 and 88096 before the 90000 handle comes back into focus.
Immediate support rests at 85000 before the 83500 and 80000 handles come into focus.
Bitcoin (BTC/USD) Two-Hour (H2) Chart, March 3, 2025
Source: TradingView.com (click to enlarge)
Support
Resistance
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