Trump’s Crypto Announcement: A Shakeout or Precursor to an Explosive Bull Run?

Last Sunday, the crypto market was rocked by big news: Donald Trump announced he would be adding Bitcoin, Ethereum, and other altcoins to the Crypto Strategic Reserve. This was the type of bullish signal many investors had been waiting for years.

The market reacted as expected: explosively. Bitcoin (BTC) shot up, altcoins made huge leaps, and Cardano (ADA) even rose by more than 60% in a short time. The sentiment immediately turned ultra-bullish.

But as we often see in crypto, the euphoria didn’t last long. The next day, virtually all gains evaporated and doubts returned. Was this a classic pump-and-dump? An exit liquidity move by big players? Or is this simply a correction within a larger upward trend?

While panic is understandable, a broader look at the market structure could tell us that this might actually be an opportunity rather than a warning.

Looking back on 2021: Bitcoin rise due to Elon Musk

On January 29, 2021, Elon Musk added the hashtag #Bitcoin to his Twitter bio. The reaction was immediate: Bitcoin rose by 20% in a short time. But as quickly as the rally began, the price fell back.

The sentiment changed rapidly then. Some investors thought this was a short-lived hype, others were convinced that the bull run remained intact. And in retrospect? That turned out to be the beginning of a macro leg up towards a new all-time high.

This pattern – a sudden rise due to big news, followed by a quick correction – is often seen in the crypto market. And if history teaches us anything, it’s that the first reaction doesn’t always determine the definitive trend.

The current situation: A typical shakeout?

There are several reasons to suspect that this quick correction is not a signal of weakness, but rather a healthy shakeout of overleveraged positions and panic sales by short-term traders.

1. Strong movements around key price points
   • Large volatility around previous all-time highs is typical in bull markets.
   • The rapid rise and subsequent retrace may be a way to shake weak hands out of the market before a real uptrend begins.
2. Whales and institutional players take advantage of volatility
   • Large players often buy in during moments of fear and liquidation.
   • The possibility that this was a coordinated move to temporarily depress the price before further rises occur is certainly present.
3. Sentiment shifts from euphoria to doubt – a classic bullish signal
   • When everyone is bullish, it’s often time for a correction.
   • When people suddenly doubt, that’s often the moment when larger movements upwards can follow.

This does not mean that an immediate rally is guaranteed, but it does indicate that the underlying trend is still intact.

Possible scenarios: What can we expect?

While nothing is certain in the crypto market, there are three realistic scenarios for the coming weeks:

1. Rapid Recovery Movement towards new heights
   • The shakeout was a temporary correction, and the market soon begins a next upward movement.
   • Bitcoin could stabilize and rebuild momentum towards new all-time highs.
2. Temporary consolidation before the next rise begins
   • The market moves sideways and tests support and resistance levels before a new rally emerges.
   • This could be a healthy structure for the longer term.
3. Longer correction or bearish reversal
   • Although less likely given the strength of the market, it’s always possible that this is a signal of a deeper correction.
   • A fallback to lower support levels would not be ruled out in that case.

For now, scenario 1 or 2 seems most likely, given the bullish nature of the market in the long term.

Conclusion: Optimism, but with realistic risk management

While the correction caused fear, these are precisely the moments when long-term investors look at the larger trend.

• Historically, these kinds of movements have often led to further rises.
• Fundamentally, the adoption of crypto continues to grow, and the fact that a world power like America is now actively building reserves is bullish in the long term.
• Volatility is part of crypto, and large outliers – both up and down – are more the rule than the exception.

Cautious optimism is therefore in order, but as always in crypto: stay alert, consider different scenarios, and have a solid strategy.

The coming weeks will be decisive. Whether this is the start of a new explosive upward movement, or just a temporary hype, will soon become apparent.

Disclaimer: The analyses above are based on technical patterns and trends in the crypto market. It is crucial to emphasize that this information is not intended as financial advice. Cryptocurrency investments inherently carry risks and are subject to volatility. For investment decisions, it is recommended to conduct your own research, seek financial advice, and only invest what you can afford to lose.