Key Insights:
US Strategic Reserve announcements by Donald Trump helped crypto markets recover from last week's fall.
At present, Cardano, XRP, and Solana have secured a spot in the reserves with possible future inclusions like Hedera and Litecoin.
Besides the US Reserve, upcoming ETFs have also helped altcoins like XRP, SOL, LTC, and others recover quickly.
Another major factor that helped crypto markets recover is the short covering in the markets.
The crypto markets bounced back from $2.84 trillion yesterday to $3.1 trillion today after Donald Trump announced that XRP, ADA, and SOL would be included in the US National Digital Assets Stockpile, also referred to as the US Strategic Crypto Reserves.
The decision led to a decent short covering in Bitcoin and Ethereum, while XRP, Solana, and Cardano saw a parabolic rise. However, memecoins were left untouched. A couple of days ago, memecoins were regulated in the US, with SEC calling them tokens with zero utility.
The crypto market Fear and Greed Index rose up to a neutral zone of 39 from the levels of 10 seen last Friday. If this bounceback had not taken place, we would have seen further crashes as most of the cryptocurrencies were on their bull market base support levels. By the end of the day, the fear and greed index rose to 16 but was still in the extreme fear zone.
Crypto Fear and Greed Index Shows Extreme Fear at 16
Last weekend, most of the market participants had shorted Bitcoin, which was visible on the overall Crypto Market Option Chain. You can see in the graph below that Call options are abundant (green candles) in the market while Put options (red candles) are scarce. Selling call options has been one of the most popular ways of short-selling any crypto in the market.
Bitcoin Put/Call Ratio in the Current Markets
With the current recovery, this has at least been avoided for the near term. Further, as the decision of the Whitehouse AI and Crypto Working Group approaches this June, we could see more rallies in the market based on expectations of lenient crypto regulations.
Donald Trump had been vocal about his pro-crypto policies even before the US Elections making some bold promises like ending Biden's anti-crypto crusade, firing the SEC Chief Gary Gensler and starting a US Strategic Crypto Reserve.
Keeping his promises, he announced yesterday that the US Crypto Reserve would indeed be a multi-asset one with confirmed assets being XRP, Solana, and Cardano.
XRP was probably chosen after negotiations from Ripple CEO Brad Garlinghouse, Solana due to its strong infrastructure, which also supports the $TRUMP coin while Cardano was probably chosen because of its strong smart contracting capabilities.
Shockingly, Ethereum did not find a mention despite being the central pillar of 50-odd blockchains, hundreds of DeFi protocols, and thousands of dApps.
Besides the bold decision on US Crypto Reserves, Donald Trump is also likely to play a critical role in approving US Altcoin ETFs starting with Litecoin, XRP, and Solana.
ETFs are a very easy way to trade and invest in crypto. It also acts as a convenient bridge between traditional investors and crypto markets. Lately, we saw large financial giants like Goldman Sachs accumulating $1.5 billion worth of Bitcoin ETFs.
Last week, we saw excessive shorts in the markets with Bitcoin facing a crisis where there was a possibility of a fall below $60k for the first time since October 2024.
Bitcoin Put/Call Ratio in the Current Markets on Friday 28 Feb 2025
We can see that Put options which are used to go long on any crypto, rose from 76.9k to 84.3k. We expect further short covering in the markets longer the time Bitcoin stays above $90k and closes in on $95k.
Bitcoin Put/Call Ratio in the Current Markets on Monday 03 March 2025
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.