Trump's Crypto Reserve Proposal Sparks XRP 40 Rally Then 20 Drop

In a significant development, former President Trump has proposed the creation of a strategic cryptocurrency reserve for the United States. This reserve would include major cryptocurrencies such as Bitcoin, Ethereum, Solana, Cardano, and XRP. The announcement has generated considerable interest and volatility in the cryptocurrency market, particularly for XRP. Initially, the inclusion of XRP in the reserve proposal led to a 40% rally, pushing its price close to $3. However, the momentum was short-lived as macroeconomic uncertainties and skepticism from key financial institutions dampened the enthusiasm.

XRP's price faced resistance near the $3 mark, leading to a consolidation around $2.40. The latest U.S. Non-Farm Payroll report, which revealed rising unemployment, further fueled concerns about persistent inflation and a potentially more hawkish Federal Reserve. This, combined with the easing of tariffs on Mexico and Canada, created a mixed sentiment in the market, leading to profit-taking near the $3 mark.

JPMorgan's latest report has cast doubt on the approval of the U.S. strategic crypto reserve, highlighting significant hurdles in gaining congressional approval. The report suggests that the probability of such a reserve materializing remains below 50%. Additionally, the inclusion of smaller tokens like XRP outside of Bitcoin and Ethereum could raise more concerns about risk and volatility. Similar state-level Bitcoin reserve proposals have recently failed in several regions due to concerns over volatility and regulatory hurdles.

Despite the initial rally, XRP's price has struggled to hold gains, with bulls facing resistance at key levels. The technical structure of XRP suggests a pivotal battle ahead, with support levels forming near $2.47 and $2.39. If XRP fails to hold these levels, it could expose lower support at $1.95. Conversely, if the price holds above $2.47 and volume picks up, a renewed push toward $2.99 and $3.20 is likely. However, the market remains cautious, with leveraged long positions facing liquidations if critical support levels are not maintained.