Cryptocurrency traders experienced a surge in market activity on March 2 following an announcement by former US President Donald Trump regarding the establishment of a crypto strategic reserve. This reserve would include Bitcoin (BTC), Ether (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA). The news triggered significant buying, with Bitcoin’s price rising from approximately $85,000 to $95,000, while Cardano surged over 72%. Other altcoins also saw substantial gains.
However, Aurelie Barthere, principal research analyst at Nansen, noted that creating a US crypto reserve would require congressional approval, which could take time. Nicolai Sondergaard, another research analyst from the same firm, added that the selected tokens for the reserve might experience volatility. Prior to Trump’s announcement, sentiment in the cryptocurrency sector had been negative, with CoinShares reporting $2.9 billion in outflows from cryptocurrency exchange-traded products last week, marking the third consecutive week of outflows after a 19-week inflow streak.
Bitcoin’s price analysis shows that it fell below the 20-week exponential moving average ($90,623) last week but found solid buying support near the 50-week simple moving average ($75,534). While the moving averages suggest an advantage for buyers, the relative strength index (RSI) indicates weakening bullish momentum. A sustained drop below the 20-week EMA could signal a corrective phase toward the 50-week SMA. Conversely, holding above the 20-week EMA would indicate continued positive sentiment, potentially retesting the all-time high of $109,588. A break above this level could push Bitcoin toward $138,000.
Ether has been range-bound between $2,111 and $4,094 for several weeks. Both moving averages have started to decline, and the RSI is in negative territory, suggesting an advantage for sellers. A break below $2,111 could lead to a deeper correction toward $1,500. However, a strong rebound from $2,111 could signal a resurgence, with potential resistance at $4,094.
XRP has struggled to sustain above $3, with the 20-week EMA ($2.18) and RSI indicating an advantage for buyers. Breaking and maintaining above $3 could signal the start of an uptrend toward $4 and $5. A breakdown below the 20-week EMA could lead to a deeper correction toward $1.50.
Solana rebounded off the $125 support but faced selling pressure near the 50-week SMA ($173). The 20-week EMA ($191) has started to decline, and the RSI is below the midpoint, indicating an advantage for sellers. A break below $125 could push Solana toward $80. Conversely, sustaining above the 20-week EMA could open the door for a rally toward $260.
Cardano is attempting to form a cup-and-handle pattern, which could complete with a break above $1.25. The 20-week EMA ($0.82) and RSI suggest an advantage for buyers. A close above $1.25 could push Cardano toward $2.26. However, a breakdown below the 20-week EMA could result in a range formation between $1.25 and the 50-week SMA ($0.59).
— news from Cointelegraph