Market Reaction to Trump’s Strategic Reserve Announcement
On Sunday, bearish positions on major cryptocurrencies suffered a staggering loss of nearly $600 million as traders found themselves on the wrong side of the market following former President Donald Trump’s announcement regarding a U.S. strategic reserve for various digital tokens. Sundays typically witness lower liquidity levels, which can lead to significant price fluctuations since it requires less capital to influence asset prices.
In the past 24 hours, Cardano’s ADA surged by an impressive 60%, while XRP and Solana’s SOL both saw increases of approximately 25%. Bitcoin (BTC) also experienced a notable rise of 9%. The futures market saw BTC-tracked contracts bearing the brunt of losses, with over $344 million wiped out across both long and short positions. Following closely was the ETH-tracked futures market, which recorded $170 million in liquidations.
Futures tied to ADA, XRP, and SOL each faced liquidations exceeding $70 million, marking their highest levels since September 2024, according to data from Coinglass. Liquidations occur when an exchange forcibly closes a trader’s leveraged position due to the inability to meet margin requirements, resulting in either a partial or total loss of the trader’s initial margin.
These unusually high liquidation levels can serve as a valuable indicator when combined with other market metrics in trading strategies. A surge in liquidations may signal that assets are overbought and due for a correction or profit-taking, rendering it a contrary dataset worth monitoring.
In light of this, the open interest in the futures market—representing the total number of unsettled bets—has skyrocketed by as much as 40% for XRP, ADA, and SOL as traders brace for ongoing volatility.
Bitcoin (BTC) made a striking rebound, soaring to over $93,000 during early trading hours in Asia on Monday. This recovery helped offset some of the losses incurred last week when the price plummeted to as low as $83,500 due to macroeconomic pressures, including U.S. tariffs and a stronger performance of safe-haven assets like the yen and gold.
Some analysts had projected that the leading cryptocurrency might decline to the mid-$70,000 range, with an increase in short positions and open interest reflecting a bearish sentiment. However, Trump’s remarks have renewed bullish expectations for the market, at least in the short term. Traders remain cautious, though, regarding the sustainability of any rally until clearer reverse plans emerge. Consequently, there is renewed interest in BTC reaching the $100,000 mark, as highlighted in an analysis by CoinDesk earlier on Monday.
