1. Possible cause analysis
Continuing uncertainty of Trump's policies
Recently, Trump proposed a 'U.S. cryptocurrency strategic reserve' plan, announcing it on March 2. On the same day, BTC rose more than 10%, briefly reaching $92,000. However, due to the vague details of this plan, investors are confused about its specific implementation and subsequent impact, leading to a loss of market confidence and triggering sell-offs. Moreover, the source of funding for the plan is also under scrutiny. If it relies solely on confiscated assets (worth $19 billion in BTC) to support this plan, it will be difficult to create a sustained and stable influx of funds, and market enthusiasm is likely to cool quickly, prompting a price correction in BTC.
Technical adjustment after market overheating
On March 2, BTC successfully broke through the $90,000 mark. However, if today's price fails to stabilize above $88,000, it could likely be a normal adjustment triggered by short-term market overheating. When the market rises too quickly and accumulates a large amount of profit-taking, it easily triggers some investors to cash out. Once the price drops close to the key support level of $85,000, it may trigger a large number of stop-loss orders, leading to a surge in sell orders and further exacerbating the price decline.
Macroeconomic pressure
The government's SBR policy has many uncertainties, raising market concerns. At the same time, BTC has a certain correlation with U.S. stocks. If U.S. stocks decline on March 4 due to Trump's tariff policies or expectations of high interest rates from the Federal Reserve, risk appetite will decrease, and investors will reduce their allocation to high-risk assets. As a type of risk asset, BTC may also follow U.S. stocks down.
Large sell-offs or hacker fund movements
There have been precedents where hackers sold BTC/ETH and other cryptocurrencies, affecting the market. If there are similar large transfers on the blockchain today, for example, if whale accounts sell large amounts of BTC, it will instantly increase market supply, breaking the supply-demand balance. In the absence of sufficient buying power, it is likely to exacerbate the decline in BTC prices.
Trading sentiment at the beginning of the week
On Monday (March 3), if BTC fails to continue the weekend's upward momentum, market trading volume may be sluggish, with low participation from both buyers and sellers. In this case, even small fluctuations in capital could have a significant impact on prices, amplifying price volatility. If bearish forces continue to dominate today, it will sustain this downward pressure, causing BTC prices to drop.