Key Takeaways
- Speculation suggests the US DOJ may be liquidating seized Bitcoin, impacting its price.
- Clarity on Bitcoin’s price movement linked to DOJ actions is expected within 30 days.
David Bailey, a well-known Bitcoin advocate and CEO of BTC Inc, speculated that Bitcoin’s recent price decline might be connected to the US Department of Justice’s (DOJ) selling activities.
“If the DOJ has been liquidating America’s bitcoin with haste (in defiance of the President) ever since getting court approval to do so 3 months ago… then Bitcoin’s price action makes perfect sense,” Bailey, who recently attended the White House Crypto Summit alongside other industry leaders, wrote on X.
In a follow-up statement, Bailey indicated that clarity on the situation should come within “30 days.”
His comment came after President Trump issued an executive order to establish a strategic Bitcoin reserve using seized coins.
Under Trump’s new order, the Secretaries of Treasury and Commerce will be responsible for building budget-neutral strategies for further BTC acquisitions, provided that these strategies impose no incremental costs on American taxpayers.
The exact amount of Bitcoin, as well as other altcoins seized by the US authorities, remains unknown. According to data tracked by Arkham Intelligence, a US government-labeled wallet currently holds 198,109 BTC worth nearly $16 billion.
In an interview with Bloomberg TV last Friday, White House AI and crypto czar David Sacks said that the government would conduct a full audit of its crypto holdings following the establishment of the Strategic Bitcoin Reserve.
The audit is part of Trump’s executive order, which aims to ensure that all digital assets, including Bitcoin, are properly accounted for and safeguarded. According to Sacks, the DOJ may possess up to 200,000 BTC, but an official audit is necessary for verification.
Last December, the DOJ was authorized to sell approximately 69,370 Bitcoin seized from the Silk Road darknet marketplace. A January report from GIP Digital Watch, however, suggested that the US government has not yet taken steps to sell their Bitcoin holdings.
Analysts see Bitcoin testing lower support before potential recovery
It’s still unclear if the DOJ has offloaded part of the government’s Bitcoin holdings. What is clear, however, is the waning enthusiasm for the US Strategic Bitcoin Reserve narrative, as no new purchases are anticipated in the near future.
Moreover, concerns over a potential recession have deepened after Trump left open the possibility of an economic downturn in a recent Fox News interview, adding more downward pressure on risk assets.
Bitcoin hit a low of $79,300 on Monday morning as bearish sentiment continued to dominate the global financial markets, according to CoinGecko data.
The total crypto market cap plunged around 5% to $2.7 trillion in the last 24 hours, while the Crypto Fear and Greed Index tumbled seven points, firmly landing in the “extreme fear” zone.
Ryan Lee, chief analyst at Bitget Research, expects Bitcoin to test support levels between $70,000 and $75,000 this week, with resistance around $85,000-$87,000.
“A failure to maintain the $77,000 level could lead BTC to test the lower range of $70,000–$72,000. However, if the market sees a recovery, a potential bounce from $75,000 could push the price back into the $80,000–$85,000 range,” Lee said in a Monday note.
“The most likely scenario for this week suggests a mid-week test of $72,000–$75,000, with Bitcoin stabilizing near $83,000 by March 18-19, depending on broader market sentiment, external factors like regulatory news and the upcoming FOMC meeting,” he stated.
