US crypto reserves are difficult to curb market decline, BTC once again falls at $90,000 mark

Author: ChandlerZ, Foresight News

From the evening of March 3 to the morning of the 4th, Trump's plan to include crypto assets in the US strategic reserves failed to reverse the overall market decline against the backdrop of the global macroeconomic cloud. News of Trump's announcement of inclusion of crypto assets in his strategic reserves triggered a brief carnival in the market, but soon calmed down. Bitcoin fell 13% after a brief rise, almost completely repenting the gains; Ethereum fell to nearly $2,000 after soaring to $2,550, and even fell below its recent lows. Other tokens that previously led the rise, such as SOL, also gave up most of the gains.

At the same time, the three major U.S. stock indexes also fell sharply, with the S&P 500 falling 1.76%, the Nasdaq falling 2.64%, and the Dow Jones Industrial Average turning from a rise of nearly 200 points to a plunge of more than 600 points. Technology stocks, as a representative of risky assets, have been under more severe selling pressure, with Nvidia's stock price plummeting nearly 9%, while the Magnificent 7 index, composed of seven major tech giants in the United States, fell 3.45%. Funds have quickly withdrawn from high-risk assets to traditional hedging targets, forming a typical hedging trading model.

CoinMarketCap data shows that the total market value of crypto assets fell below $3 trillion again, hitting a new low since November 2024. The scale of liquidation in the derivatives market has expanded significantly. Coinglass statistics show that the amount of liquidation in the entire network in 24 hours reached US$1.068 billion, of which US$38,600 for Bitcoin contracts were cleared and US$20,700 for Ethereum contracts were cleared.

Tariff storm triggers market panic

Trump reiterated the imposition of 25% tariffs on Canada and Mexico from March 4, and made it clear that "there is no room for negotiation." Trump also mentioned that from April 2, countries that impose tariffs on U.S. products will face equal retaliatory tariffs. Canada is ready to impose retaliatory tariffs on US goods worth $155 billion. Buffett has rarely publicly opposed the policy, saying that tariffs are "to some extent an act of war" that will trigger inflation and harm consumers.

The US economy is currently facing a rare macroeconomic fragility. The Atlanta Fed GDPNow model has sharply lowered its first-quarter GDP contraction expectations from 1.5% to 2.8%, a nearly doubled reduction that is far beyond the scope of normal economic forecast corrections, indicating that economic fundamentals are deteriorating at an accelerated pace. At the same time, manufacturing activity has almost stagnated, while raw material price indicators hit two-year highs, forming a typical precursor to stagflation. This combination of stagnation of economic growth and inflationary pressure has always been a nightmare for macroeconomic policy makers because it weakens the effectiveness of conventional monetary policy tools. Against this backdrop, Bridgewater founder Dalio warned that if the United States does not reduce its deficit, it will face a debt crisis within three years.

U.S. suspends Ukrainian military aid to increase uncertainty

According to a report by Xinhua News Agency, Trump has ordered a suspension of all military aid to Ukraine until Ukraine's leaders show "responsibility to reach a peace agreement between Russia and Ukraine."

The decision comes after Trump and Zelensky had a fierce argument in the Oval Office. The Wall Street Journal reported that the Trump administration has stopped funding new weapons sales to Ukraine and is considering freezing weapons transport in U.S. stocks, which could seriously affect Ukraine's combat capability at critical moments in combat with Russian troops.

In response to changes in U.S. policy, European leaders have agreed to form a "voluntary coalition" at the London summit to develop a Ukrainian peace plan submitted to Trump, which will include the provision of ground troops and military assets. The UK has also announced new military aid packages, including £1.6 billion in air defense missile procurement support and £2.26 billion in defense loan agreements.

This policy shift may herald a fundamental change in the U.S. policy towards Ukraine and the potential reconstruction of the international security landscape. The market's expectations for the escalation of geopolitical conflicts in the future have prompted investors to withdraw funds from risky assets such as US stocks and crypto assets, chasing safe-haven assets, resulting in the decline of these two major markets at the same time.

At the same time, this change in the security pattern indicates that traditional macro crises may be intertwined with international political risks, forming a multi-level risk system. The U.S. decision to suspend Ukraine's military aid may inspire more defensive measures in the region, and the resulting political and economic uncertainty will further impact global financial markets. Faced with the deteriorating external environment, investors have difficulty in determining which asset class can better avoid risks, so they choose to wait and see. The decline in market liquidity has further intensified the simultaneous decline between the US stock market and the crypto market.

Market critical point

The market is currently at the critical point where multiple policy storms and uncertainty intertwined. Investors' expectations for global risks have increased significantly under the influence of tariff storms and the United States' suspension of Ukraine's military aid. This expectation has spawned financial risk aversion, causing traditional risky assets such as the US stock market and crypto asset market to fall simultaneously, and market confidence has suffered a heavy blow. At the same time, the intensification of geopolitical tensions has caused the market to doubt the macroeconomic outlook, and liquidity has been suppressed, and the risk premium has risen, thus casting a shadow on the trend of the crypto asset market in the short term.

Against this background, there are many possibilities for the future trend of crypto market. On the one hand, the United States will hold its first crypto asset summit on March 7. At that time, Trump's speech and further interpretation of the future national strategic Bitcoin reserve plan are expected to rekindle market enthusiasm and bring positive signals to some crypto assets. On the other hand, although Trump's idea of ​​"national strategic Bitcoin reserves" proposed last year has attracted attention, it is still unclear how the US government will implement it in detail, and its internal logic and operability are still widely questioned. If the United States adopts the method of retaining Bitcoin in confiscated assets in the future, its support for the market may gradually emerge. However, whether this model can balance political operations and market spontaneous development still needs to be observed policy details and implementation.

Overall, the future market trends in the crypto market will seek a balance between policy shifts, international security situations and the global macroeconomic environment. In the medium and long term, if the global economic situation tends to stabilize and the policy implementation has a clear direction, crypto assets may be expected to gradually recover from the current fluctuations. However, at this stage, the market still faces high uncertainty, and risk premium and volatility are both at high levels.