Crypto Market Overview

This week, the crypto market led by Bitcoin (BTC) received positive news but reacted briefly before returning to stagnation and negative trajectories.

A weekly report from market analytics platform CryptoQuant revealed that real spot demand for BTC is still in contraction territory, while bitcoin’s apparent demand has continued to decline following the acceleration period seen in November-December 2024.

“Trump-n-Dump”

Earlier this week, the market witnessed what CryptoQuant tagged a “Trump-n-Dump.” This refers to traders massively selling their digital assets after a rally triggered by an announcement concerning a United States Strategic Crypto Reserve.

On March 2, President Trump revealed that he had directed the Presidential Working Group to move forward with the creation of a strategic digital asset reserve, which would include BTC, ether (ETH), Solana (SOL), Ripple (XRP), and Cardano (ADA), reinforcing his promise to make the United States the crypto capital of the world.

After the announcement, prices for the selected crypto assets spiked: BTC surged by 14%, ETH by 20%, XRP by 40%, SOL by over 20%, and ADA by at least 60%.

By Monday morning, crypto prices returned to their pre-announcement levels, erasing all gains recorded during the rally. As prices fell, traders rushed to offload their assets on exchanges. The number of BTC flowing into trading platforms per hour spiked from 500-1,000 to 6,739 on March 3, while ETH inflows rose to approximately 300,000.

Additionally, about 2 billion XRP flowed into crypto trading platforms on Sunday and Monday, with coin’s hourly inflows hitting 193 million. CryptoQuant found that most of these flows came from whales executing transactions of 1 million+ XRP.

Crypto Assets Record Deeper Corrections

According to CryptoQuant, high inflows into trading platforms indicated that traders were selling assets to capitalize on the sudden price spike. Currently, the prices of BTC, ETH, SOL, XRP, and ADA are down by at least 3% daily, per data from CoinMarketCap.

Interestingly, these cryptocurrencies recorded deeper corrections on March 6 after Trump signed an executive order establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile. The order set up reserves consisting of cryptocurrencies forfeited in criminal or civil proceedings. The U.S. government will neither sell its cryptocurrencies nor acquire additional assets beyond those obtained through forfeiture proceedings.

Nonetheless, CryptoQuant insists that BTC requires higher demand to experience a sustained price rally, regardless of economic decisions made by the U.S. government.