Crypto Market Sees Cautious Optimism After Trump's Reserve Announcement

By Omkar Godbole (All times ET unless indicated otherwise) The crypto market's unpredictable nature is on full display, with sentiment shifting from pessimism to optimism in just 24 hours, following President Donald Trump's announcement of BTC, ETH, XRP, SOL, and ADA as potential candidates for the strategic crypto reserve. This development has led to a broad-based valuation increase, with bitcoin reestablishing $89,000 and $91,000 as crucial support levels. The options market is also showing renewed interest in $100,000 bets. However, some analysts are urging caution, citing the lack of concrete actions and the potential for another market correction. "The crypto market is gaining momentum, but it's essential to note that no tangible steps have been taken yet, and the absence of immediate catalysts could lead to a slow correction," according to Valentin Fournier, analyst at BRN. As the initial excitement subsides, tough questions may arise, such as the need for congressional approval and the potential concerns surrounding the inclusion of XRP, ETH, SOL, and ADA, which have limited links to economic activity. This raises questions about the government's decision to invest in assets with minimal economic ties, which may not generate significant economic growth and improve debt-to-GDP ratios. Additionally, allegations of insider trading related to Trump's announcement may impact sentiment. An unidentified trader reportedly made a $6 million profit from a 50x leveraged long bet on BTC and ETH, sparking concerns about potential insider meddling. For now, the market is experiencing a risk-on sentiment, which could lead to gains in XRP/BTC, SOL/BTC, and ADA/BTC crosses if Wall Street follows suit. Solana's co-founder Anatoly Yakovenko has expressed support for the SIMD-0228 proposal, aiming to reform Solana's staking mechanism and reduce inflation. More details about the proposed reserve are expected to be revealed at the White House crypto summit on Friday. In the meantime, key events to watch include Wednesday's U.S. ISM non-manufacturing PMI and Friday's payrolls report. The U.S. 10-year yield has declined for seven consecutive weeks, indicating a potential economic slowdown. If the upcoming data sets fall below estimates, the focus may shift back to this, potentially weighing on risk assets. Key events to watch include token events, conferences, and token talks. Derivatives positioning, market movements, and bitcoin stats will also be closely monitored. By Shaurya Malwa Other key metrics to watch include crypto equities, ETF flows, spot BTC ETFs, and spot ETH ETFs, according to Farside Investors. Overnight flows, chart of the day, and while you were sleeping will provide further insights into the market.