Debates Over a U.S. Crypto Reserve and Its Impact on Prices
Crypto discussions are heating up, and social platforms are responding to major political and economic actions. Negative sentiment towards Trump is rising, fearing that his policies, such as tariffs and proposed U.S. crypto strategic reserves, can manipulate the market. Investors are concerned that tariffs in Canada, Mexico and China may boost volatility in cryptocurrencies and stocks.
Meanwhile, debates on the legitimacy of crypto protected areas in the United States have surged, with doubts about which assets (Bitcoin, Ethereum, XRP, Solana or Cardano). As these uncertainties in developments put traders on the edge, market volatility continues.
As a result, as Bitcoin struggles to maintain its position, falling again by $910 million, now hovering around $85, the cryptocurrency market remains in a state of uncertainty. Although Blockchain Analytics Nansen said that while institutional adoption and regulatory advances continue, short-term price action continues.
https://twitter.com/nansen_ai/status/1897135059066609724
Altcoins suffered the worst loss of AI tokens
Most Tier 1 projects suffer double-digit losses YTD, with XRP (+5.3%) being the only exception. BTC (-7.87%), tons (-7.94%) and TIA (-9.55%) all face declines.
Layer 2 (L2) solutions and AI tokens hit the biggest hit, with L2 lowering by more than 40%, and some AI-centric tokens lowered nearly 90% from their highs. The only exception to this downturn is the 10% manufacturer (MKR) gaining, with XRP growing by 5%.
Ethereum’s chain activity has slowed significantly, with median gas expenses falling to 1 GWEI, the lowest in more than a year. Although Ethereum’s Layer 2 network (e.g., basic) remains active, overall market participation appears to be decreasing.
In addition to MKR (+10.85%), Defi tokens struggle, which benefited from USD adoption. Other Defi projects, such as ENA and AERO, are also one of the biggest losers, reducing YTD by 50%.
What’s next?
Market sentiment is split – some view current price action as a bearish retest, while others believe it is recovering. BTC’s re-entering into its previous range suggests that the latter is more likely. Many tokens have traced the proceeds from election-driven rallies and may take time to recover. Nansen analysts are weaker in major areas Keep Neutral in the short term, but optimistic in the long term. Many traders focus on stable breeding rather than chasing the altcoin pump, waiting for a clearer reversal of the trend before taking major actions.
Currently, Bitcoin is back in its previous range, and emotions are still mixed. Some view the current decline as an opportunity to accumulate core assets such as BTC, SOL and TIA, while others view it as a possible further disadvantage. The market is still in holding mode until a clearer trend appears
