Bitcoin Hits 3.5-Month Low as Altcoins Plunge 21% - Fear Grips Market Ahead of $100K Battle

Digital assets face brutal selloff as market sentiment turns fearful

The Crypto Carnage

Bitcoin just touched its lowest price in three and a half months while alternative cryptocurrencies collectively bled 21% - sending shockwaves through digital asset portfolios everywhere. The fear gauge is flashing red as traders brace for what could be the ultimate test: holding the psychologically crucial $100,000 level.

Market Psychology Breakdown

That 'fear' reading isn't just emotional - it's quantifiable market data screaming caution. When sentiment tanks this hard, even long-term holders start sweating. The altcoin massacre proves this isn't just Bitcoin's problem - the entire digital ecosystem is feeling the heat.

The $100K Standoff

All eyes are on that six-figure threshold. Break below it and we could see panic selling accelerate. Hold above it and bulls might just have their 'line in the sand' moment. Either way, this is where real convictions get tested - and weak hands get shaken out.

Meanwhile, traditional finance types are probably sipping champagne while muttering 'I told you so' - because nothing makes Wall Street happier than watching disruptive technology take a temporary stumble.

Officials Reviewing Alternatives to Gold Revaluation for Bitcoin Reserve Setup: Lummis

In a recent Bloomberg interview, Lummis said officials are exploring ways to establish a reserve without relying solely on Gold revaluation.

She said Treasury Secretary Scott Bessent and White House staff are working through those details and that she welcomes their support for a strategic reserve built around Bitcoin.

I truly believe the Strategic bitcoin Reserve is the only solution to offset our national debt.

I applaud @POTUS and his administration for embracing the SBR, and I look forward to getting it done. pic.twitter.com/e24NBOJ3v0

The senator has signaled urgency. Last month, she said the buying framework for a reserve could begin at any time and credited President Trump for creating the conditions to MOVE quickly. She described the legislative process as slow, but said the funding mechanism does not have to wait.

No New Spending Planned as Bitcoin Reserve to Draw From Seized Assets

Questions remain about financing. Lummis has not outlined a comprehensive plan for how the government would capitalize the reserve. However, the administration’s March fact sheet said the reserve would start with Bitcoin already controlled by the Treasury through criminal or civil forfeitures.

That base has since grown substantially. Following the record-breaking forfeiture of nearly 130,000 BTC tied to criminal cases, US Bitcoin reserves have climbed to over $34b at current prices, giving the government one of the largest known sovereign holdings globally.

The fact sheet also said additional Bitcoin could be added through budget-neutral strategies that avoid new taxpayer costs. That approach aligns with guidance from the Treasury in August, when Secretary Bessent said the government would not purchase Bitcoin outright for the reserve and would instead rely on confiscated assets as the initial store of value.

Lummis endorsed that view at the time, calling a budget-neutral path the right way forward. She also suggested that revaluing the nation’s gold holdings to current market prices and transferring the uplift could help build the reserve.

Policy Momentum Builds as Washington Weighs Bitcoin’s Role in National Strategy

Momentum has grown in policy circles since March, when President Trump signed an executive order to establish the reserve. The directive sparked speculation that government wallets could begin to accumulate Bitcoin more visibly in the months ahead.

Market strategists see a policy arc forming. Galaxy Digital’s head of research Alex Thorn said the US could formalize the reserve framework before the end of 2025, pointing to broader bipartisan recognition of Bitcoin as both a store of value and a financial asset.

Supporters argue a reserve could diversify sovereign assets and provide an inflation-resilient buffer. Critics will want clearer guardrails, including custody, transparency and rules for drawdowns, before any large-scale accumulation proceeds.