Market Overview: Bitcoin
This week, Bitcoin is trading about 20% below its all-time high, a dip overshadowed by a historic move in its journey. On March 7, 2025, President Donald Trump signed an executive order launching the “Strategic Bitcoin Reserve” for the U.S., backed by roughly 200,000 bitcoins—worth around $17 billion—seized from federal forfeiture cases. The order locks these bitcoins in place, prohibiting sales and framing them as a “digital Fort Knox”—a long-term store of value for the nation.
Some speculators grumbled—the 200,000 BTC is just 1% of Bitcoin’s total supply and a tiny speck next to the U.S. annual budget. But I see it differently: this is about cementing Bitcoin as a real asset. Unlike government bonds, which are promises tied to a government’s credit and can falter if trust erodes, a real asset like Bitcoin or gold has standalone value—scarce, durable, and independent of any issuer.
This move signals Bitcoin’s legitimacy, positioning it as a rival to gold in all over the world national reserves. For those of us watching, it’s not hard to imagine a future—maybe within decades—where Bitcoin’s role mirrors or even eclipses gold’s, driven by its digital scarcity and global adoption.
Bitcoin
The Weekly chart of Bitcoin
Bitcoin’s price action this week reflects a tug-of-war between bulls and bears after a decisive breakdown from a breakout mode pattern last week. As we’ve noted in prior reports, tight consolidations at pivotal levels often signal sharp moves. Last week’s drop found support at a key confluence: the 26-week exponential moving average (EMA), representing six months of trading history.
This week, Bitcoin gapped up strongly—below the prior week’s high—then reversed hard in a significant downturn. Midweek, it attempted a bounce but closed slightly below the week’s midpoint, a subtle nod to bearish pressure.
Despite this, the closing price exceeds last week’s close, a small but meaningful detail. Bearish trends typically feature bearish gaps (downward jumps), not bullish ones like we saw. Historically, Bitcoin favors bullish breakouts over bearish ones—its long-term narrative of adoption and scarcity often fuels sustained upward moves, while downturns from consolidation tend to be shallower, driven by tactical exits rather than structural shifts.
Looking ahead, the market leans bearish in the near term. Even if a rally emerges, resistance looms above. The double-top formation likely trapped late-entry bulls, who may now sell to cut losses, amplifying downward pressure. Key levels to watch include:
- 26-Week EMA: A dynamic support zone reflecting six months of price action, currently holding as a floor.
- Weekly Breakout Point: The 2024 high from an 8-month trading range, now a potential target or reversal zone.
The Daily chart of Bitcoin
Since the price formed a breakout mode pattern at the range’s high, we’ve outlined clear scenarios. The bearish breakout delivered a 2R (risk-to-reward) move, pulling back to test the 21-day EMA this week. In our last report, with Bitcoin at 2025’s lows, we flagged a potential “last entry” for bears: a rally to the EMA followed by a strong rejection.
That’s exactly what unfolded. The price surged, hit the 21-day EMA, and faced a firm rejection—twice—forming a double top, or what traders might call a “Low 2” setup.
It looks like a shorting opportunity. Placing a stop above Friday’s high, with targets at:
- The 2025 low.
- The weekly breakout point.
- A measured move below the breakout point, derived from the broken trading range’s height.
Is this probable? I’d call it low-probability but high-reward. The risk-reward ratio shines thanks to strong “magnets” below—levels likely to attract price action. That said, these could also mark the bottom. If the 2025 don’t hold, the next floor should not be far off.
Personally, I lean toward upside potential. After this bearish setup plays out, I’d step back and wait for a bullish breakout from a breakout mode pattern—my preferred ground.
The past few weeks have validated our calls. The breakout mode pattern on the Bitcoin ETF and the subsequent triangle on the spot chart nailed the moves. But here’s the reality: even the world’s best traders are right only 40% of the time on scenario predictions.
Streaks happen—6 or 7 wins in 10, or a dismal 1 or 2. Success isn’t about being right every time; it’s about sizing. A winning streak with tiny trades won’t move the needle, but a losing streak with oversized bets can sink you. Streaks are unpredictable, so what’s a solution?
Compound Winners: Start small. Al says something like 1/4 of what you think is small. Only increase size when risking prior profits. This caps downside while letting winners run. Of course, the maximum risk should never exceed 2 or 2.5% per trade.
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Market analysis reports archive
You can access all the weekend reports on the Market Analysis page.
What is the reason for so few BTC updates? It’s almost as if you guys don’t get paid for this stuff.