Bitcoin Follows as Trump’s Strategic Reserve Coins ‘ADA, XRP, SOL’ Experience a Dump

On March 2, cryptocurrency traders were taken by surprise when US President Donald Trump declared a strategic reserve for cryptocurrencies, encompassing Bitcoin (BTC), Ether (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA). This announcement spurred significant buying activity, causing Bitcoin to surge from approximately $85,000 to $95,000, while Cardano soared over 72%. Other altcoins also experienced a robust rally.

Nonetheless, Aurelie Barthere, principal research analyst at Nansen, indicated that the implementation of a US crypto reserve will require time due to the necessity of a Congressional vote. Nicolai Sondergaard, another research analyst from the same firm, informed Cointelegraph that the tokens chosen for the reserve are expected to experience volatility.

Before Trump’s announcement, the overall sentiment in the cryptocurrency market was negative, with CoinShares reporting $2.9 billion in outflows from crypto exchange-traded products last week. This represented the third week of outflows following a 19-week period of inflows.

In the wake of the initial surge driven by short covering and buying, the question remains: will the rally sustain? Let’s examine the charts to identify key support and resistance levels.

Bitcoin Price Analysis

Last week, Bitcoin fell below the 20-week exponential moving average ($90,623) and approached the 50-week simple moving average ($75,534); however, the long tail on the candlestick indicates strong buying interest at lower price levels.

The upward sloping moving averages suggest a favorable outlook for buyers, yet the negative divergence on the relative strength index (RSI) implies that bullish momentum is waning. Should the price drop and remain below the 20-week EMA, it would signal the onset of a corrective phase that might reach the 50-week SMA.

Conversely, if the price stays above the 20-week EMA, it would indicate sustained positive sentiment, implying that traders are willing to buy on dips. This would enhance the chances of retesting the all-time high of $109,588. A breakout above this level could initiate the next phase of the uptrend toward $138,000.

The BTC/USDT pair exceeded the 20-day EMA on March 2, but buyers were unable to maintain the momentum at higher levels. The $90,000 to $85,000 range is expected to attract significant buying interest. If the price bounces from this support zone, it could increase the likelihood of rallying above $100,000.

This optimistic outlook would be undermined if the price continues to decline beneath the support zone, indicating that bears are gaining control. The pair may fall to $78,258 and subsequently to $73,777.

Ether Price Analysis

Ether has remained confined within a range of $2,111 and $4,094 over the past few weeks, indicating buying activity near support levels and selling pressure close to resistance levels.

Both moving averages have begun to decline, and the RSI is positioned in negative territory, suggesting a bearish advantage. If the price continues to fall and breaks below $2,111, it will indicate the beginning of a deeper correction targeting $1,500.

On the flip side, a vigorous rebound from $2,111 suggests that bulls are aggressively defending this level. Buyers will need to drive the ETH/USDT pair above the moving averages to signal a recovery. Subsequently, the pair may approach $4,094, a likely significant barrier.

The pair rebounded from the $2,111 support and reached the 20-day EMA ($2,544) on March 2. The failure to break through the 20-day EMA suggests that bears are selling during rallies. Sellers will once again aim to push the pair below $2,111; if successful, it may decline to $1,500.

For a bullish stance, buyers must swiftly drive the price above the downtrend line. The pair could then target a rally to $3,400 and later to $3,750.

XRP Price Analysis

XRP has struggled to maintain levels above $3, indicating that bears are actively defending this price point.

The upward trending 20-week EMA ($2.18) and the RSI remaining in positive territory suggest buyers have an advantage. Bulls must push and maintain the price above $3 to indicate the commencement of the next upward movement toward $4 and then $5.

This positive outlook will be invalidated if the price declines and breaks below the 20-week EMA. There is strong support at $2; however, if this level fails, it could signal a more significant correction to $1.50.

The bulls pushed the pair above the $2.84 resistance on March 2, but they are currently struggling to hold this breakout. The price has since dropped to the 20-day EMA ($2.50), which is crucial to monitor. A bounce off the 20-day EMA could see bulls attempt to push the pair toward $3.40. A breakout above this level might commence the next phase of the uptrend toward $5.

Conversely, closing below the 20-day EMA poses a risk of a decrease to solid support at $1.99. A breach below this level will complete a bearish head-and-shoulders pattern, potentially leading to a downtrend to $1.50 and then $1.28.

Related: Why is Ethereum (ETH) price up today?

Solana Price Analysis

Solana has rebounded from the $125 support, but the subsequent relief rally is meeting selling pressure near the 50-week SMA ($173).

The 20-week EMA ($191) is starting to decline, and the RSI is just below the midpoint, indicating that sellers may have the upper hand. There exists minor support at $157; however, a breach of this level could see the SOL/USDT pair retesting the $125 support line. A break and close below $125 could lead to a plunge to $80.

To stave off downside pressure, bulls will need to quickly elevate and sustain the price above the 20-week EMA. Achieving this would potentially open the door to a rally towards $220 and later $260. A break and close above $260 could initiate a new uptrend.

On March 2, the pair surged above the 20-day EMA ($167), but bulls could not maintain higher levels, reflecting bear activity at these elevations. If the price remains below the 20-day EMA, the pair could slide to $125.

On the upside, a break and close above $180 would indicate buyer reengagement. The pair might then advance to the 50-day SMA ($200) and later to $220. Sellers are expected to vigorously defend the zone between $240 and $260.

Cardano Price Analysis

Cardano is attempting to form a cup-and-handle pattern on the weekly chart, which will be confirmed by a break and close above $1.25.

The 20-week EMA ($0.82) is trending upwards, and the RSI is in the positive zone, indicating a bullish advantage. If the price closes above $1.25, the ADA/USDT pair could ascend to $1.60 and subsequently to the pattern’s target of $2.26.

In contrast, if the price declines and breaks below the 20-week EMA, it would suggest a range formation in the near term. The pair could oscillate between $1.25 and the 50-week SMA ($0.59) for a while.

The pair surged beyond the descending channel pattern on March 2, signaling that the correction may have concluded. Nonetheless, sellers have yet to relent, pulling the price back into the channel. Should the price remain trapped within the channel, it would suggest market rejection of the breakout. The pair may then retreat to the 50-day SMA ($0.85), likely garnering buyer interest.

If bulls aim to maintain their advantage, they must quickly push and hold the price above the resistance line. The pair could then rally to $1.25.

This article does not contain investment advice or recommendations. Every investment and trading action involves risk, and readers should perform their due diligence before making any decisions.