Relief Rally Begins, But Can It Last?

DAILY MARKET OVERVIEW

What’s Fueling the Bounce?

👋 Hey, Crypto Enthusiasts! We're now seeing the first signs of a relief rally, but what’s driving this rebound? Let’s break it down.

The crypto market was in extreme fear yesterday as large sell-offs pushed Bitcoin down to $81K. Panic selling spread across the market, with altcoins suffering significant losses. Traders were bracing for further downside as uncertainty loomed.

Since then, we are beginning to see a relief rally, and you may be wondering why. Several factors are driving this short-term recovery, but whether it is sustainable remains to be seen.

There are a few key reasons behind this market rebound:

• Rumors of a Capital Gains Tax Exemption – Reports are circulating that Trump may announce a tax exemption on crypto capital gains at Friday’s Crypto Summit. If confirmed, this could have a major impact on the crypto market by removing one of the biggest tax burdens on traders and investors.
  

• Potential U.S.-Ukraine Mineral Deal – It’s expected that Ukraine is preparing to sign a mineral deal with the U.S., which could be a step toward a peace deal with Russia. Any reduction in geopolitical tensions would likely increase investor confidence across all financial markets, including crypto.
  

• Tariff Rollback Speculation – United States Secretary of Commerce Howard Lutnick stated that Trump may roll back tariffs on Canada and Mexico today. A more trade-friendly U.S. policy could improve overall market sentiment and liquidity.
  

• Bitcoin Reserve Strategy Announcement – The Commerce Secretary confirmed that President Trump will reveal a U.S. Bitcoin reserve strategy at the White House Crypto Summit on Friday. If this includes an official government Bitcoin allocation, it could be one of the biggest catalysts for long-term crypto adoption.
  

• U.S. Senate Votes to Overturn Controversial Crypto Tax Rule – The Senate voted to repeal an IRS rule that required brokers to report gross proceeds from digital asset sales. This decision, backed by a bipartisan supermajority, is seen as a significant victory for the crypto industry and suggests that regulatory clarity may finally be on the horizon.

What to Expect This Week

• Bitcoin’s relief rally may continue into Friday’s Crypto Summit.

• Increased volatility is expected, especially if tax exemption rumors are confirmed or dismissed.

• Altcoins remain vulnerable, particularly those not included in the rumored U.S. crypto reserve strategy.

• Ethereum and Solana show no clear signs of recovery, with risks still skewed to the downside.

Market conditions remain highly uncertain. While today’s rebound is promising, traders should be cautious as any disappointment on Friday could lead to another wave of selling.

THIS NEWSLETTER IS BROUGHT TO YOU BY:
OPENWALLET

Next-level security for your digital assets

Experience top security with Open Wallet. Your wallet blends user-friendliness with strong security.

TWITTER SENTIMENT

U.S.-Based Coins Gain Momentum 🇺🇸 

Market sentiment has shifted toward U.S.-based coins following Trump’s announcement that Solana, XRP, and Cardano will be included in the proposed U.S. crypto reserve strategy.

• Traders anticipate that the capital gains tax exemption (if it happens) could be limited to these reserve-backed coins.
  

• This has led to increased demand for Solana, XRP, and Cardano, which have outperformed other assets in the short term.

Will the U.S. Actually Buy These Coins?

Despite the market excitement, there is still no confirmation that the U.S. will actively purchase these tokens. 

• The U.S. may receive these holdings directly from the projects’ treasuries rather than buying them on the open market.
  

• This could be a strategic market play by Solana, XRP, and Cardano to boost sentiment and drive price action.

Market Speculation vs. Reality

• If the capital gains tax exemption is broad, the entire market could see a strong rally.
  

• If it only applies to U.S.-listed assets, traders may dump other holdings to rotate into these specific coins.
  

• Without clear confirmation of U.S. purchases, any rally could be short-lived, leading to a sell-the-news event.

Final Thought

While optimism is building around Friday’s Crypto Summit, the market remains speculative. Stay cautious and be prepared for high volatility.

NEWS OVERVIEW

The Latest Crypto Headlines 📰 

Metaplanet Adds $43.9M in Bitcoin, Raising Holdings to 2,888 BTC
Metaplanet acquired 497 BTC for $43.9 million, continuing its bitcoin accumulation strategy, now holding 2,888 BTC worth $251 million in total.

Ethereum’s Pectra Upgrade Activated on Sepolia Testnet Ahead of Mainnet Launch
Ethereum developers launched the Pectra upgrade on the Sepolia testnet, marking the final test before the expected mainnet launch in April.

Bukele Says El Salvador Will Keep Buying Bitcoin Despite IMF Agreement
El Salvador’s president dismissed speculation, stating the country will continue bitcoin purchases despite agreeing to IMF conditions limiting BTC-related activities.

Pump.fun Trading Volume Drops 94% as Memecoin Hype Fades
Memecoin launch platform Pump.fun saw daily volumes collapse from $3 billion to $170 million, reflecting trader fatigue and declining speculative interest.

YOUTUBE INFLUENCER SUMMARY

Summary From The Top Influencers 📷️ 

Benjamin Cowen - Ethereum: The Butterfly Effect (05.03.2025 Summary)

Benjamin Cowen dives into Ethereum’s long-term price trajectory, using historical patterns and macroeconomic analysis to predict what comes next. His focus is on a Butterfly Harmonic pattern that could shape Ethereum’s future.

1. Ethereum’s Chart Is Following a Predictable Pattern

• Cowen has been tracking a Butterfly Harmonic pattern in Ethereum’s price movements.

• This pattern suggests Ethereum is in a cycle where it forms higher lows before a major rally.

• The potential bottom range is between $1,200 and $1,800.

2. The Federal Reserve Will Decide Ethereum’s Fate

• Past cycles show that Ethereum bottoms when the Fed stops Quantitative Tightening.

• If the Fed ends QT in mid-2025, Ethereum could start its next big rally just like in 2019.

• Until then, Ethereum may struggle to gain momentum.

3. Could Ethereum Hit $6,000 or More in This Cycle?

• If the Butterfly Harmonic pattern plays out, Ethereum’s next major top could be between $6,000 and $7,500.

• These targets align with historical Fibonacci levels.

• However, if Bitcoin peaks early and enters a bear phase, Ethereum may fail to reach these targets and see a weaker rally.

4. What If We’re in a Left-Translated Cycle?

• A left-translated cycle means Bitcoin and Ethereum peak early, leading to a longer bear market.

• If this happens, Ethereum could still rally but then crash hard in 2026, similar to past market cycles.

• A US recession in 2026 could accelerate this downturn.

Final Take

Ethereum’s price movements are following a clear historical pattern, but its future depends on the Federal Reserve and Bitcoin’s cycle. If the Fed ends QT soon, Ethereum could rally toward $6,000 or higher. If macro conditions weaken, it may face a harsh correction in 2026.

CryptoRUs - Will Bitcoin and Crypto Be Saved By This Annoucement? (05.03.2025 Summary)

George from CryptoRUs breaks down the latest Bitcoin price crash, the impact of new tariffs, and a rumored crypto tax break that could change the game.

1. Bitcoin Drops as Wall Street Panics

• Bitcoin fell from $93,000 to $83,000 in a single day as markets sold off risk assets.

• The main reason is new US tariffs on China, Mexico, and Canada, which are sparking fears of inflation.

• Major stocks like Nvidia (-9%), Tesla (-7%), and MicroStrategy (-5%) are also down.

• Because institutions now hold large amounts of Bitcoin ETFs, their sell-offs are dragging Bitcoin down too.

2. Tariffs Are Fueling Economic Fears

• Trump has imposed higher tariffs on imported goods.

• China, Mexico, and Canada are retaliating with their own tariffs, worsening market uncertainty.

• US retailers warn that consumer prices will rise, which could increase inflation and delay Fed rate cuts.

• This uncertainty is pushing investors to sell riskier assets, including Bitcoin.

3. A Huge Crypto Tax Break Could Be Announced This Friday

• A leaked report suggests the US may introduce a crypto tax exemption.

• The rumored policy states that US-based crypto held for over one year will not be subject to capital gains tax.

• If true, this would be a massive boost for long-term investors and could drive Bitcoin and certain altcoins much higher.

• The exemption may apply only to cryptos that Trump previously mentioned in his crypto reserve plan, including Bitcoin, Ethereum, Solana, XRP, and Cardano.

4. Whales Are Buying the Dip

• Over 25,000 Bitcoin were withdrawn from exchanges in recent days.

• This suggests large buyers and institutions are quietly accumulating despite the price drop.

• Most of these purchases are happening over-the-counter, meaning they don’t immediately affect price action.

5. Institutional Adoption Continues With More Crypto ETFs Coming

• The SEC is softening its stance on crypto, dropping lawsuits against major companies.

• More ETFs are on track for approval, including Hedera, Dogecoin, Cardano, and Solana.

• Once approved, these ETFs could bring in even more institutional money.

6. Tesla, Apple, and the Tariff Effect

• Apple relies on China for iPhone production, so higher tariffs could force price hikes or lower profits.

• Tesla’s valuation is extremely high, but falling demand and higher costs could lead to stock troubles.

• If Tesla and Apple stocks continue to slide, overall market sentiment could remain bearish.

Final Take

Bitcoin’s sell-off is driven by Wall Street panic over tariffs, but whales are still accumulating. If the crypto tax break rumor is true, it could trigger a huge rally for US-based cryptocurrencies. The next major event to watch is this Friday’s potential tax announcement. If confirmed, it could change the game for long-term investors.

CRYPTO MEMES

Not the Kangaroo Market 🫠