Scott Bessent Warns of Bitcoin Pullback as Buying Stalls

Scott Bessent Outlines U.S. Bitcoin Reserve Strategy — No New Purchases, Market Braces for Next Move

The cryptocurrency market was jolted today by remarks from renowned investor Scott Bessent, signaling a shift in how the United States might approach its substantial Bitcoin holdings. In a statement that quickly caught the attention of traders worldwide, Bessent revealed that while the U.S. Treasury will maintain a Bitcoin reserve valued in the tens of billions of dollars, it will refrain from purchasing additional coins.

The decision, described by some analysts as both conservative and strategic, comes at a time when Bitcoin prices are showing signs of volatility after touching recent highs. For a market driven by liquidity flows and large institutional moves, such an announcement raises critical questions about price direction, investor sentiment, and long-term adoption of the world’s leading cryptocurrency.

Inside Scott Bessent’s Bitcoin Reserve Strategy

Speaking to reporters, Bessent clarified that the government’s reserve will consist solely of assets already in its possession — primarily coins seized in criminal cases and other enforcement actions.

Source: X

“We’ll have a Bitcoin reserve, but, of course, we won’t actually be buying any coins,” Bessent said, underscoring that the move is not about market accumulation but preservation of existing holdings.

According to his estimates, the current reserve value sits somewhere between $15 billion and $20 billion. More notably, Bessent indicated that the Treasury will halt any further sales of these assets, effectively taking them off the market for the foreseeable future.

The decision to stop selling could have measurable implications for supply dynamics. While the U.S. government has historically auctioned seized Bitcoin to the public — sometimes at significant discounts — the pause in liquidations means less selling pressure from an entity that holds a substantial chunk of the circulating supply.

Market Reaction: A Mixed Picture

As news of the strategy broke, Bitcoin’s price traded at $119,132, down roughly 3.43% on the day, according to TradingView data. The decline followed a recent rally that saw prices briefly touch the $124,000 mark before profit-taking set in.

Source: TradingView

Technical indicators present a nuanced picture:

• Relative Strength Index (RSI) sits at 55.22, suggesting Bitcoin is neither overbought nor oversold. This leaves room for further upside if buying momentum resumes.

• MACD (Moving Average Convergence Divergence) remains in positive territory, indicating that the broader uptrend is intact, though recent momentum has slowed.

Analysts note that these readings place Bitcoin at a crossroads — with potential for both a rebound toward recent highs or a deeper correction if support levels fail.

Why This Strategy Matters for Bitcoin Traders

The decision not to purchase additional Bitcoin eliminates a potential bullish catalyst, but the freeze on government sales could help stabilize the market during volatile periods. For many traders, this creates a more predictable supply environment, at least in the short term.

“Taking billions in Bitcoin out of the selling pipeline could have the same effect as a large corporate treasurer deciding not to liquidate their reserves,” said a market strategist at a major investment bank. “It reduces the risk of sudden supply shocks from forced sales.”

On the other hand, the absence of fresh government buying means that institutional demand must come from other sectors — namely, asset managers, hedge funds, and publicly traded corporations — if Bitcoin is to sustain upward momentum.

Technical Outlook: Scenarios to Watch

Bullish Case:
If Bitcoin maintains support above $118,000, traders expect a retest of the $122,000–$124,000 range. A decisive daily close above $124,000 could open the door to a rally toward $128,000–$132,000.

Bearish Case:
Should Bitcoin fall below $118,000, the next major support lies near $115,000. A breach of that level could accelerate selling, with short-term targets as low as $112,500.

Volume and momentum will be critical in determining which scenario plays out. Low-volume recoveries often fail to break resistance levels, while high-volume sell-offs can quickly erode support zones.

Broader Implications for Crypto Policy

Bessent’s approach also hints at an evolving government stance toward cryptocurrency as a strategic asset. By holding rather than selling, the Treasury is effectively treating Bitcoin more like gold reserves — a store of value that may appreciate over time — rather than as a confiscated commodity to be liquidated immediately.

This is not without precedent. Several governments, including El Salvador and Bhutan, have accumulated Bitcoin as part of their national reserves. While the U.S. is not actively buying, simply retaining its holdings signals recognition of Bitcoin’s potential role in global finance.

Investor Sentiment: Between Relief and Uncertainty

For long-term holders, the halt in government sales is a welcome development. It removes one source of downward pressure and could help maintain price stability during market corrections.

However, some traders see the announcement as a non-event for immediate price action. “Markets move on new flows, not just on inventory decisions,” one veteran trader noted. “If there’s no buying, the effect is neutral at best in the short run.”

Still, the psychological impact cannot be underestimated. The knowledge that billions in Bitcoin will remain locked up in government reserves adds a new layer of intrigue to market dynamics.

Could This Trigger a Breakout or Just a Pause?

Bessent’s plan lands at a time when Bitcoin is approaching a potential breakout zone. Prices have consolidated between $118,000 and $124,000 for several sessions, building tension that could resolve in either direction.

The next major catalyst could come from macroeconomic events — interest rate decisions, inflation data, or changes in global liquidity — rather than from crypto-specific news. If the broader risk-on sentiment continues, Bitcoin could benefit alongside equities and other risk assets.

Conversely, a sharp shift toward risk aversion could see traders lock in profits and move to cash, sending Bitcoin back toward its recent support levels.

Conclusion: A Strategy That Buys Time

The Scott Bessent Bitcoin Reserve plan is not about making aggressive market moves. Instead, it’s a calculated decision to preserve assets, reduce market supply shocks, and maintain flexibility for the future.

Whether this proves to be a stabilizing force or a missed opportunity depends largely on how other market participants react. If private institutions step in with fresh buying, the lack of government sales could amplify upward momentum. But if demand falters, Bitcoin could drift sideways or retrace.

For now, traders will watch the $118,000–$124,000 range closely. Breakouts or breakdowns from this zone could set the tone for the remainder of the quarter. As always, in a market as volatile as cryptocurrency, staying informed and managing risk remains paramount.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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