Bitcoin, Ethereum, and XRP face carnage

Bitcoin, Ethereum, and XRP face carnage in response to Trump's policies and announcements. The total market capitalization of crypto is down to $2.784 trillion

The cryptocurrency market continues to bleed in response to Trump’s policies and announcements. The total market capitalization now stands at $2.784 trillion on Wednesday.

Bitcoin’s correlation (BTC) with the S&P 500 is 0.75 in the 30-day timeframe, highlighting the close connection between the top crypto and U.S. equities. Trumpism, or what U.S. President Donald Trump believes in at a particular moment on a particular day about a subject, has steered the crypto market sharply up or down within the first fifty days of his administration.

Why is crypto losing while Trumpism wins?

U.S. stocks are facing a slump, with the S&P 500 down nearly 8% in the past month and lower than it was the day before President Trump won the 2024 election. The index has seen a capital wipeout of $4.5 trillion.

Crypto, often viewed as one of the high-volatility risk assets, has also faced a steep decline as traders become more risk-averse and pull capital from the category.

While U.S. stock performance is among the worst ever recorded within the first 50 days of a new administration, crypto market capitalization is nearly 20% above the pre-election level, even after the correction.

When Bitcoin crossed the $100,000 milestone and hit a new all-time high, Ethereum and XRP rallied alongside. The market-wide bloodbath has brought a decline in the top three cryptos, down nearly 15%, 28% and 9% in the past month, according to TradingView data.

Trump’s pro-crypto executive orders and Strategic Crypto Reserve announcement have failed to catalyze positive sentiment among traders. Alternative.me’s Crypto Fear & Greed Index shows traders remain fearful on Wednesday.

In a February report, Forbes assessed the impact of Donald Trump’s return to the Presidency on alternative investments like digital assets. The publication noted that the outcome depends on the details of policy implementation, market expectations, and global economic conditions. While some sectors may benefit from deregulation or tax incentives, others might face reduced government support or policy shifts.

Traders will need to proactively switch strategies and adjust portfolios, trading headline to headline, and anticipate the potential changes, such as the inclusion of different tokens in the U.S. Strategic Crypto Reserve, to prioritize categories of tokens that are likely to receive favorable treatment or have inherent resilience to policy-induced volatility.

Crypto market crash, pre and post-election performance of Bitcoin, Ethereum, XRPThe crypto market and top three tokens continued their decline this week after nearly four consecutive weeks of correction. As crypto traders digest Trump’s tariff wars and executive orders, institutions and market participants have become more risk-averse and realized losses in Bitcoin are mounting.

BTC is now at a crossroads where financial easing could mean crypto tokens gain, as traders drive demand for risk assets higher. However, geopolitical headwinds and Trumpism continue to weigh heavily on the sector.

The debate on whether a Strategic Crypto Reserve would meet the expectations of the crypto community and what the inclusion of Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA) means for token holders rages on social media platforms.

Traders now wait and watch for the narrative to unfold. It is typical for the Bitcoin price to drop between 20 and 25% before it rallies during a bull market. However, the macroeconomic headwinds and higher number of market movers make it challenging to predict BTC price trends in the coming weeks and months.

The $80,000 level remains a crucial support for Bitcoin; a return to the $100,000 milestone could see BTC rally towards its all-time high and test it. However, a decline from $80,000 could push the token to pre-election levels under $70,000.

Another 15% drop from the current price level could erase all post-election gains for Bitcoin.

Ethereum price is 30% below its pre-election level, returning to the price recorded in November of 2023. A lack of institutional interest, concerns regarding changes within the Ethereum Foundation, liquidation of whales who borrowed stablecoins against their Ether holdings as collateral, and waning interest from large wallet traders have negatively impacted Ethereum’s price trend.

Ether trades at $1,846 at the time of writing, and traders await a catalyst, like SEC approval to add staking to existing Ether ETFs in the U.S. to drive gains in the largest altcoin in crypto.

XRP is the most resilient among the top three cryptocurrencies, trading 75% above its pre-election levels. At the time of writing, XRP trades at $2.1668.

Catalysts like the token’s addition to