Bitcoin Price Speculation

David Bailey, a prominent Bitcoin advocate and CEO of BTC Inc, speculated that Bitcoin’s recent price decline might be linked to the US Department of Justice’s (DOJ) selling activities.

> “If the DOJ has been liquidating America’s Bitcoin with haste (in defiance of the President) ever since getting court approval to do so 3 months ago… then Bitcoin’s price action makes perfect sense,” Bailey stated on X after attending the White House Crypto Summit with industry leaders.

Bailey noted that clarity on the situation is expected within “30 days.” This statement surfaced after President Trump issued an executive order to create a strategic Bitcoin reserve using seized coins.

Under Trump’s new directive, the Secretaries of Treasury and Commerce will devise budget-neutral strategies for further BTC acquisitions, ensuring that these strategies impose no additional costs on American taxpayers.

The exact quantity of Bitcoin and other altcoins seized by US authorities remains undetermined. According to Arkham Intelligence, a US government-labeled wallet currently holds 198,109 BTC, valued at nearly $16 billion.

In a Bloomberg TV interview, White House AI and crypto czar David Sacks mentioned that the government would conduct a full audit of its crypto holdings following the establishment of the Strategic Bitcoin Reserve. This audit is part of Trump’s executive order, which aims to guarantee proper accounting and safeguarding of all digital assets, including Bitcoin. Sacks indicated the DOJ may hold up to 200,000 BTC, but an official audit is needed for confirmation.

Last December, the DOJ was authorized to sell around 69,370 Bitcoin seized from the Silk Road darknet marketplace. Nonetheless, a January report from GIP Digital Watch suggested that the US government has yet to take steps to sell off their Bitcoin holdings.

Analysts predict Bitcoin testing lower support before possible recovery

It remains uncertain whether the DOJ has offloaded any of the government’s Bitcoin holdings. However, enthusiasm for the US Strategic Bitcoin Reserve has diminished, with no new purchases expected soon. Concerns about a potential recession have intensified, especially after Trump hinted at an economic downturn in a recent Fox News interview, adding to the downward pressure on risk assets.

Bitcoin dropped to a low of $79,300 on Monday morning, reflecting the prevailing bearish sentiment in global financial markets, as per CoinGecko data. The total crypto market cap fell around 5% to $2.7 trillion within 24 hours, while the Crypto Fear and Greed Index dropped seven points, landing firmly in the “extreme fear” zone.

Ryan Lee, chief analyst at Bitget Research, forecasts Bitcoin may test support levels between $70,000 and $75,000 this week, with resistance around $85,000-$87,000.

> “Failure to maintain the $77,000 level could lead BTC to test the lower range of $70,000–$72,000. However, if the market recovers, a bounce from $75,000 could push the price back into the $80,000–$85,000 range,” Lee remarked in a Monday note.

> “The most likely scenario for this week suggests a mid-week test of $72,000–$75,000, with Bitcoin stabilizing near $83,000 by March 18-19, depending on broader market sentiment, and external factors like regulatory news and the upcoming FOMC meeting,” he added.