Bitcoin’s recent dip in price has got everyone talking, and a prominent Bitcoin figure, David Bailey, CEO of BTC Inc, thinks he knows why. He’s suggesting that the US Department of Justice (DOJ) might be selling off some of its Bitcoin holdings, and that could be what’s pushing prices down.

“If the DOJ has been in a rush to liquidate America’s Bitcoin stash – maybe even going against the President’s wishes – ever since they got the green light from the courts three months ago, then Bitcoin’s recent price movements suddenly make a lot of sense,” Bailey tweeted on X. Bailey himself was recently at the White House Crypto Summit alongside other big names in the industry, so he’s definitely plugged in.

Adding to his initial thought, Bailey later mentioned that we should expect some clarity around this situation in the next “30 days.” So, we might not have to wait too long to find out if there’s truth to these speculations.

It’s interesting to note that Bailey’s comments come right after President Trump announced an executive order aimed at creating a strategic Bitcoin reserve using seized crypto.

Trump’s order outlines that the Secretaries of Treasury and Commerce will be tasked with figuring out budget-friendly ways to acquire even more BTC. The key is that these plans shouldn’t cost American taxpayers any extra money.

Right now, nobody knows for sure exactly how much Bitcoin, or other cryptocurrencies for that matter, the US government has seized over time. However, Arkham Intelligence, which keeps an eye on these things, points to a US government wallet holding a whopping 198,109 BTC – that’s nearly $16 billion!

In a recent Bloomberg TV interview, the White House’s point man on AI and crypto, David Sacks, mentioned that a full audit of the government’s crypto holdings will be conducted as part of setting up this Strategic Bitcoin Reserve.

This audit, part of Trump’s executive order, is all about getting a clear picture of exactly what digital assets, especially Bitcoin, the government holds and making sure they are properly accounted for and kept safe. Sacks suggested the DOJ might have as much as 200,000 BTC, but stressed the official audit is needed to confirm the real number.

Analysts Predict Bitcoin Will Test Lower Levels Before a Potential Rebound

Whether the DOJ has actually started selling off Bitcoin is still up in the air. But what’s becoming clearer is that the initial excitement around the US Strategic Bitcoin Reserve seems to be fading, especially since no new Bitcoin purchases are expected anytime soon.

Adding to the market unease, concerns about a possible recession are growing. This follows comments from Trump himself in a recent Fox News interview where he hinted at potential economic challenges. This kind of talk often puts extra pressure on assets considered to be higher risk, like Bitcoin and crypto.

Bitcoin’s price dipped to a low of $79,300 on Monday morning as a general feeling of pessimism seemed to take hold of global financial markets, according to data from CoinGecko.

Across the crypto board, the total market value dropped by about 5% in the last day, landing at $2.7 trillion. The Crypto Fear and Greed Index, a measure of market sentiment, also took a tumble, dropping seven points and firmly planting itself in “extreme fear” territory.

Ryan Lee, the main analyst over at Bitget Research, thinks Bitcoin is likely to test support levels between $70,000 and $75,000 this week, noting resistance around the $85,000 to $87,000 mark.

“If Bitcoin can’t hold above $77,000, we could see it drop down to test the $70,000–$72,000 range. However, if the market manages to turn around, a bounce up from $75,000 could push the price back up towards $80,000–$85,000,” Lee explained in a note on Monday.

“Looking at the week ahead, the most probable scenario is that we’ll see Bitcoin test the $72,000–$75,000 level sometime mid-week. After that, depending on the overall market mood, any big news on regulations, and the upcoming FOMC meeting, Bitcoin might stabilize around $83,000 by March 18th or 19th,” he added.

Share this article