XRP, SOL, and ADA Inclusion in US Crypto Reserve Pushes Traders on Edge

Amid ongoing turbulence in the cryptocurrency market, traders are grappling with a significant downturn following Bitcoin’s alarming 10% drop over a mere 24-hour period. This sudden decline has sparked chaos on crypto-centric social media platforms, evoking fears of a resurgence of the bear market that gripped investors throughout 2022, as highlighted by insights from Santiment.

Despite recent struggles, a fleeting glimmer of hope was injected into the market over the weekend as US President Donald Trump announced the formation of a US Crypto Strategic Reserve. This initiative aims to bolster the nation’s position in digital finance and represents a step forward in regulatory development, following an executive order in January 2025 that mandated the establishment of a task force to devise national cryptocurrency regulations within a set timeframe.

Initially, the market reacted positively to this news, with Bitcoin and other cryptocurrencies witnessing a surge fueled by heightened expectations for institutional backing and clearer regulatory guidelines. However, this optimism proved short-lived as a sharp market reversal emerged on Monday, effectively erasing recent gains and reviving skepticism pertaining to the viability of the Strategic Reserve.

Investor anxieties are particularly focused on which assets will be included in this reserve, sparking debates over the potential selection of cryptocurrencies such as XRP, SOL, and ADA. As details remain murky regarding how the reserve will operate, its funding structure, and integration into the financial ecosystem, speculations abound, creating a mix of skepticism and levity within the crypto community.

The approaching White House Crypto Summit is anticipated to shed light on these issues, potentially influencing the regulatory landscape for digital assets in the U.S. Until more concrete information is available, analysts caution that the scenario resembles a classic case of “buy the rumor, sell the news,” as per Santiment’s observations.

Compounding these challenges, the significant sell-off on Monday coincided with a downturn in traditional equities, where the S&P 500 experienced a notable 1.8% decline—the largest single-day drop observed in the past year. This correlation indicates that macroeconomic trends are increasingly affecting cryptocurrency prices as volatility rages across both asset classes.

Santiment has also indicated that social sentiment is likely to dictate price movements in the short term, with mentions of skyrocketing prices likely signaling a peak, while talks of more conservative Bitcoin target ranges around $70K-$75K may suggest a potential market bottom as retail investors show signs of capitulation. Despite the pervasive atmosphere of frustration and despair, history indicates that such extreme negativity often prefaces market recoveries.

In the face of this chaos, analysts from CryptoQuant suggest that there may be fruitful opportunities for long-term investors. Their report following the recent volatility highlights a 14.42% decrease in the Open Interest Change over just seven days, which typically signifies a decline in speculative trading positions. Such trends are commonly associated with market corrections or resets in trader positioning, offering potential buying opportunities amidst downturns.

Simultaneously, the Crypto Fear & Greed Index has shown a drastic transition, plummeting from a reading of 72 (indicative of extreme greed) to 26 (reflecting fear), encapsulating the growing caution among investors. Historically, levels of extreme greed above 70 have signaled likely market tops, while ensuing declines driven by fear often lead to rebounds, according to CryptoQuant’s analysis.

With lingering uncertainties over government-held cryptocurrency reserves and forthcoming regulatory frameworks, market sentiment remains on shaky ground. However, the combination of waning open interest and fear-induced selling could present strategic entry points for savvy long-term investors looking to capitalize on current conditions.