The crypto market took a sharp hit on March 4, losing $800 million in value as prices fell. After briefly crossing the $3 trillion mark, the total market cap dropped 9% to $2.77 trillion, with trading volume slipping 14% to $177 billion. Bitcoin, Ethereum, and XRP initially surged after Donald Trump announced plans for a U.S. crypto reserve, but the excitement faded quickly.
New tariffs on Mexico and Canada added more pressure, triggering a market-wide sell-off and showing how sensitive crypto remains to economic changes.
While the market turned bearish, large crypto holders—known as whales—began moving huge amounts of assets to exchanges. This happened right after Trump revealed plans to include more crypto assets in the reserve initiative.
According to CryptoQuant, XRP’s hourly inflows surged to 193 million tokens, with most transactions involving over 1 million XRP. Bitcoin inflows spiked from the usual 500-1,000 BTC per hour to a massive 6,739 BTC. Ethereum followed the trend, with nearly 300,000 ETH sent to exchanges in just one hour.
When institutional or large investors move funds to exchanges, it often signals selling pressure. Most long-term investors store their holdings in cold wallets, so large transfers to exchanges typically happen before a sell-off. The sudden spike in inflows coincided with price swings across the market, suggesting that traders took advantage of the Trump-driven rally to cash out.
CryptoQuant analysts pointed out that, despite the brief price surge, actual buying demand remains weak. Bitcoin’s “apparent demand”—a key metric that tracks the balance between newly mined coins and existing supply—has been declining since late 2024. This has now pushed demand into contraction for the first time since September 2024, raising concerns about Bitcoin’s ability to sustain future rallies.
Retail accumulation has also slowed since November, reducing buying pressure even further. Without new capital entering the market, it will be hard for crypto prices to maintain upward momentum.
Trump’s support for crypto has fueled speculation about new regulations and institutional investments, but the market’s reaction shows traders are still unsure. If demand doesn’t pick up, prices could struggle to hold their ground, even with the buzz around the U.S. crypto reserve plan.
Now, investors are watching to see whether this move will lead to long-term growth or just more price swings.
The market lost $800M as Bitcoin, Ethereum, and XRP fell due to new tariffs, weak demand, and whale sell-offs after Trump’s crypto reserve plan.
While it created buzz, weak buying pressure means crypto prices may struggle to rise unless fresh capital enters the market.
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