Was there really a fundamental news event that painted the entire market red?
Yes, one of the key factors was an unexpected announcement from U.S. Treasury Secretary Scott Bessent. He confirmed that the government would not make new purchases of Bitcoin for its reserve, which was a surprise at a time when the market anticipated otherwise — even after BTC reached new highs near USD 124,000 — CointelegraphAl JazeeraYahoo FinanceCoinGape.
Cointelegraph reported that Bitcoin fell below USD 119,000 right after Bessent's announcement, who confirmed on Fox Business that "we are not going to buy [Bitcoin], but we are going to use confiscated assets" Cointelegraph.
Al Jazeera added that after this announcement, the price dropped by as much as 6%, as the market felt disappointed to see that there would be no additional demand from the government Al Jazeera.
CoinGape emphasized that Bessent confirmed a BTC reserve of between USD 15 billion and USD 20 billion and announced a pause in sales, leaving behind any expectations of additional purchases CoinGape.
Was that the only cause?
To a large extent, yes, that was an unexpected fundamental news event that catalyzed today’s decline. It was especially shocking because it occurred right after Bitcoin reached a historic high, which amplified the market's reaction.
However, other factors may have contributed, such as expectations of possible Fed rate cuts — although that was more of a driver for the previous rally — or recent macroeconomic indicators. But the most concrete and reported cause today was this Treasury announcement.
In summary
Bessent's announcement was not officially anticipated and generated an unexpected and swift reaction in the market.
Bitcoin fell significantly, in part because it was expected that the government would continue buying; by confirming that it would not, a key support for demand was withdrawn.
