Bitcoin Surges 11% to $94,598 on Reserve Hopes, Then Drops 9%

Trader Eugene Ng Ah Sio recently expressed his view that the strategy of holding for profits, commonly known as "hodling," is most applicable to Bitcoin. This perspective comes at a time when the cryptocurrency market has been experiencing significant fluctuations due to various macroeconomic policies and regulatory developments.

Bitcoin's price movements over the past week have been particularly volatile. On March 3, the price of Bitcoin surged from $85,199 to $94,598 following a social media post by a prominent figure, which suggested that crypto assets could become part of the national reserve. This news triggered a surge in market sentiment, but the market quickly returned to rationality, and the price fluctuated before stabilizing around $86,000 by March 9.

Throughout the week, Bitcoin's price was influenced by a combination of positive policies, market sentiment, and technical indicators. The Fear and Greed Index, for instance, broke through 85 on March 3, indicating extreme greed, but fell to around 60 by March 6 as the market corrected. The Relative Strength Index (RSI) also showed signs of overbought conditions, further supporting the market's correction.

Regulatory developments also played a significant role in the market dynamics. On March 5, an executive order was signed to establish a strategic Bitcoin reserve, which was seen as a move to consolidate Bitcoin's status as "digital gold." However, the order involved hoarding existing confiscated assets rather than outright purchases, which disappointed some market participants who had expected more direct government buying.

Despite the market volatility, miners remained cautiously optimistic. On-chain data showed that miners had not sold their holdings since February 28, indicating confidence in the market's long-term outlook. However, the decline in Bitcoin prices and the increase in mining costs put pressure on miners' earnings. The energy costs and mining efficiency also played a crucial role in the market dynamics, with the total network computing power fluctuating significantly, reflecting miners' adjustments to profitability and energy costs.

Trader Eugene's view that hodling for profits is most applicable to Bitcoin is based on the asset's status as a store of value and its historical performance. Bitcoin has consistently shown resilience in the face of market volatility and regulatory uncertainty, making it a preferred choice for long-term investors. Other cryptocurrencies, while offering potential for short-term gains, may not have the