Trump's Crypto Reserve Surge: Bitcoin Hits $93K, But Challenges Loom

Cryptocurrency markets experienced a surge in prices this week, with Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) leading the rally. The bullish momentum was fueled by Donald Trump's announcement of a strategic crypto reserve ahead of the upcoming summit on Friday. BTC price rose by 2.85% to hit $93,000, while ETH and XRP prices soared by 2% and 5%, respectively, reaching $2,365 and $2.65.

However, the news-driven rally may not last as investors begin to realize the challenges associated with setting up a crypto reserve in the United States. Establishing such a reserve requires congressional approval, which may prove difficult given the narrow Republican majority in the House of Representatives and the need for 60 votes in the Senate. Arthur Hayes, founder of BitMEX, dismissed the announcement as mere words, stating that Trump needs congressional approval to borrow money or revalue the gold price higher before he can buy Bitcoin and other cryptocurrencies.

The crypto market may reflect on these legislative risks, potentially leading to a reversal in the recent price rallies. Alternatively, prices could continue to rise ahead of Friday's crypto summit before falling afterward. Analysts warn that the reserve may only include Bitcoin, as Trump often starts negotiations with an absurd proposition and then walks it back later.

Technical analysis suggests that the recent price rallies may not be sustainable. Ethereum price has crashed after peaking at $4,092 on December 16, forming a triple-top pattern and hovering near the neckline at $2,123. The Average Directional Index (ADX) has risen to 23, indicating a strong momentum. The next targets for ETH price are $2,000 and $1,500.

Bitcoin price has bounced back to $95,000 after crashing to $78,117 last week but remains under pressure. It has failed to move above the 50-day Exponential Moving Average (EMA) and has retested the neckline of the double-top pattern at $108,355. A break and retest pattern is a popular bearish continuation sign, suggesting a neutral short-term outlook for Bitcoin. More gains will be confirmed if it rallies above $100,