- Trump’s crypto reserve proposal briefly boosted Bitcoin, Ethereum, XRP, SOL, and ADA before fading.
- His statements fueled a "Pump & Dump" effect, adding to market volatility.
- Meanwhile, Ethereum risks falling below $2,000 if it fails to reclaim $2,400.
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Cryptocurrency markets started March on a volatile note. While the main driver of price fluctuations in the market is US President Trump's rhetoric, crypto investors added to market uncertainty by reacting quickly to Trump's statements and actions.
Trump’s Crypto Reserve Plan
By the end of the week, Donald Trump once again brought up the idea of creating a crypto reserve in the US. He even promised that this time, there will be five main cryptocurrencies in the crypto reserve—not only Bitcoin but also Ethereum, XRP, SOL, and ADA. While these statements were greeted with enthusiasm in the crypto market, serious gains were observed in these altcoins. However, this excitement was short-lived, lasting only 24 hours.
The Trump administration’s implementation of the tariff plan for Canada, Mexico, and China triggered sell-offs in the markets, further escalating trade tensions. Cryptocurrencies also continued their downward trend, giving back their gains after a brief period of optimism.
The "Pump & Dump" Effect from Trump
Trump's rhetoric and actions have created a "Pump & Dump" effect in the cryptocurrency market, a phenomenon typically seen in low-volume cryptocurrencies. According to the statements made, this fluctuating trend can be expected to continue throughout the month. A crypto summit is expected to be organized at the White House towards the end of this week. While crypto investors will be attending this summit, the SEC's crypto task force is also preparing to hold its first meeting.
Despite recent positive developments in the crypto market, institutional control over these assets means the market is increasingly influenced by global economic trends. As a result, Trump has been more enthusiastic about the reserve issue, which was a focal point for crypto participants before the tariffs were imposed. This temporarily shielded the markets from a tariff-induced decline. Now, investors are turning their attention to the upcoming White House crypto summit on Friday. However, if Trump's rhetoric fails to translate into concrete action, market sentiment could turn increasingly negative, and investors may stop reacting to his statements.
Is Reserve Creation Realistic?
On the other hand, the Fed was reluctant to create a Bitcoin reserve last month, citing legal constraints. Despite this, Trump's continued optimism may start to be priced in at lower rates in the crypto markets after some time. The reality is that inflationary pressures from US policies, combined with the Fed’s delay in cutting interest rates, are weighing on the markets.
Additionally, as the global economy stands on the brink of trade wars, it remains uncertain how countries’ retaliatory measures will impact their economies. Geopolitical tensions also remain high. As such, risk appetite is low, and crypto traders are treating spikes as profit-taking opportunities.
Ethereum Continues to Seek Support
Ethereum failed to break through the $2,750 resistance last month and continued its downtrend as selling pressure reaccelerated. If the volatility of the last three days is ignored, ETH's movement toward a critical support area in the $1,950–$2,000 range continues.
After the reaction purchases that may come from this region, the $2,400 resistance level may come into focus again. For Ethereum to recover, it will be extremely important to establish support above $2,400. Otherwise, weekly closes below $2,000 may lead to a further acceleration of the downward trend.
Key Ethereum Levels to Watch
As seen on the daily Ethereum chart, we have summarized the critical Fibonacci levels and support zones as follows:
- $2,400 (Fibonacci 1 level): Ethereum is attempting to hold this critical $2,400 level. If this region is lost, $2,088 (recent low) and $1,959 (Fibonacci 1.272) can be monitored as support as sell-offs increase.
- $2,744 (Fibonacci 0.786): To regain bullish momentum, Ethereum must first break past the $2,400 resistance level. In this case, there may be a recovery up to $2,744.
- $3,000 (Fibonacci 0.618) and above: If Ethereum can break above $2,744, the Fib 0.618 level around $3,000 could be tested. However, this could act as a strong resistance zone.
Although the Ethereum market is currently under selling pressure, the Stochastic RSI has turned upward from oversold territory after Sunday’s bounce. This could lead to a resurgence of reaction buying toward the end of the week, depending on whether the cryptocurrency remains above $2,000.
Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.