After an initial surge following former U.S. President Donald Trump’s announcement of a Crypto Strategic Reserve, the market is experiencing profit-taking, leading to a sharp decline in ADA, XRP, and SOL, with Bitcoin also facing downward pressure.
Market Reaction to Trump’s Crypto Reserve Announcement
Cryptocurrency traders witnessed an unexpected rally on March 2 after Trump revealed plans for a U.S. Crypto Strategic Reserve, which would include Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Cardano (ADA), and XRP.
The announcement triggered a surge across the crypto market, with Bitcoin jumping from $85,000 to $95,000 and Cardano soaring more than 72%. Other altcoins also posted significant gains.
However, Nansen principal research analyst Aurelie Barthere cautioned that establishing a U.S. crypto reserve would take time as it requires Congressional approval. Fellow Nansen analyst Nicolai Sondergaard added that selected reserve tokens would likely see increased volatility in the coming weeks.
Before Trump’s announcement, the crypto market sentiment was bearish, with CoinShares reporting $2.9 billion in outflows from exchange-traded cryptocurrency products last week. This marked the third consecutive week of outflows following a 19-week streak of inflows.
Now, with a mix of profit-taking and uncertainty, the question remains: Is this a short-term pullback, or is the market headed for deeper lows? Let’s analyze the key support and resistance levels for major cryptocurrencies.
Bitcoin Price Analysis
Bitcoin’s recent rally lost momentum as the price fell below the 20-week exponential moving average (EMA) at $90,623 before dipping toward the 50-week simple moving average (SMA) at $75,534. However, strong buying pressure at lower levels helped BTC recover.
- The upsloping moving averages indicate that bulls still have the advantage, but a negative divergence on the Relative Strength Index (RSI) signals weakening bullish momentum.
- If BTC fails to reclaim the 20-week EMA, it could enter a corrective phase, potentially retesting the 50-week SMA.
- A successful defense of the 20-week EMA would indicate strong bullish sentiment, increasing the likelihood of a retest of the all-time high at $109,588. A breakout above this level could push BTC toward $138,000.
- The BTC/USDT pair briefly surged above the 20-day EMA on March 2, but bulls failed to sustain higher levels. The $90,000–$85,000 support zone will be crucial.
- If BTC bounces from this zone, it could fuel a rally beyond $100,000. However, a break below $85,000 could expose Bitcoin to further downside toward $78,258 and then $73,777.
Ethereum Price Analysis
Ethereum (ETH) has been range-bound between $2,111 and $4,094 for several weeks, with buying activity near the support level and selling pressure near resistance.
- Both moving averages are turning downward, and the RSI is in negative territory, giving the advantage to sellers.
- If ETH drops below $2,111, it could enter a deeper correction targeting $1,500.
- A strong rebound off $2,111 would indicate that bulls are defending key support, increasing the chances of a rally toward $4,094.
- The ETH/USDT pair rebounded off $2,111 and tested the 20-day EMA ($2,544) on March 2, but failed to break through.
- If bears push the price below $2,111, ETH could slide to $1,500. Conversely, a breakout above the downtrend line could lead to a recovery toward $3,400 and $3,750.
XRP Price Analysis
XRP has struggled to sustain above $3, as bears continue to defend this resistance level.
- The 20-week EMA ($2.18) is trending upwards, and the RSI remains positive, suggesting that bulls have a slight advantage.
- To confirm the next bullish phase, XRP must break and hold above $3, which could lead to an upward move toward $4 and eventually $5.
- However, if XRP fails to hold above the 20-week EMA, it could see a deeper correction toward $2. A break below $2 would signal a potential drop to $1.50.
- The XRP/USDT pair briefly moved above the $2.84 resistance on March 2, but bulls struggled to hold gains.
- The 20-day EMA ($2.50) serves as critical support. If XRP bounces from here, it could attempt another rally to $3.40 and possibly $5.
- A break below $2.50, however, could push XRP toward $1.99, forming a bearish head-and-shoulders pattern, with downside targets at $1.50 and $1.28.
Solana Price Analysis
Solana (SOL) attempted a rebound from the $125 support level, but selling pressure emerged near the 50-week SMA ($173).
- The 20-week EMA ($191) is turning downward, and the RSI is near the midpoint, giving a slight edge to bears.
- If SOL drops below $157, the pair could retest the $125 support. A break below $125 may trigger a steep decline toward $80.
- On the bullish side, SOL must break and hold above the 20-week EMA ($191) to resume its upward trajectory toward $220 and $260.
- The SOL/USDT pair briefly surged above the 20-day EMA ($167) on March 2 but failed to hold higher levels, signaling strong resistance.
- A close above $180 could push SOL toward $200 and $220, while a break below $125 would suggest further downside.
Cardano Price Analysis
Cardano (ADA) is forming a cup-and-handle pattern on the weekly chart, which would complete upon a breakout above $1.25.
- The 20-week EMA ($0.82) is rising, and the RSI remains positive, giving bulls an advantage.
- A break above $1.25 could propel ADA toward $1.60 and potentially $2.26.
- Conversely, if ADA fails to sustain above the 20-week EMA, it could trade within a $1.25 to $0.59 range for some time.
- The ADA/USDT pair briefly broke above a descending channel pattern on March 2, but sellers pushed the price back inside.
- If ADA fails to break out again, it could drop toward the 50-day SMA ($0.85).
- To resume an uptrend, ADA must break and sustain above resistance at $1.25.
Conclusion
Trump’s Crypto Strategic Reserve announcement initially sparked a bullish rally, but profit-taking and uncertainty have since triggered a market pullback. Bitcoin, Ethereum, XRP, Solana, and Cardano are now at key support levels, with bears testing bullish resilience.
If major support zones hold, the market could resume its upward trajectory. However, a break below key levels could signal a deeper correction. Traders should watch for strong rebounds at support levels and confirmations of trend reversals before making their next moves.
