U.S. Crypto Reserve Launch Could Mark Market Cycle Peak, Analysts Warn

The announcement of a U.S. Crypto Strategic Reserve has sent shockwaves through the cryptocurrency market, with Bitcoin, Ethereum, and altcoins surging in response. However, analysts warn that the launch of the reserve could signal the top of the current market cycle, drawing comparisons to previous peaks seen during Coinbase’s IPO (April 2021) and El Salvador’s Bitcoin adoption (October 2021).

While the reserve’s exact timeline remains uncertain, experts believe its formation could significantly influence market sentiment and liquidity, potentially leading to either a sustained bull run or a short-term correction.

Following the news, Bitcoin rebounded to $85,000, recovering from its recent dip. Ethereum also gained momentum, climbing past $2,800 as traders anticipated strong institutional inflows.

One of the biggest winners was Cardano (ADA), which surged 70% in 24 hours after being included in the reserve. The sudden price increase marks one of ADA’s largest single-day gains in recent years, fueling speculation about its future role in the reserve’s strategy.

Meanwhile, over $1.32 billion worth of tokens, including Solana (SOL), Dogecoin (DOGE), and Avalanche (AVAX), are set to unlock in the coming week, raising concerns about potential liquidity shifts in the market.

Historical data suggests that major crypto events often align with market tops. In 2021, Coinbase’s IPO marked Bitcoin’s peak at $64,000, while El Salvador’s Bitcoin adoption preceded a sharp downturn.

“Whenever we see high-profile government or institutional adoption, retail investors tend to overestimate the long-term impact, leading to short-term euphoric buying,” said James Carter, senior analyst at CryptoQuant.

However, other experts argue that the reserve’s long-term implications could create a new phase of institutional confidence, potentially pushing Bitcoin to new all-time highs beyond $100,000.

Despite the initial excitement, regulatory hurdles remain a significant concern. Legal and political challenges could delay the reserve’s full implementation, introducing uncertainty into the market.

“The reserve is a strong concept, but it depends on how smoothly regulators integrate it into existing financial frameworks,” said Michael Reeves, head of research at Blockchain Insights.

The market’s reaction in the coming weeks will be critical. If Bitcoin can sustain its gains and break above $90,000, it could trigger a new wave of institutional investments. However, if uncertainty over the reserve leads to a sell-the-news event, a correction toward $75,000-$80,000 could be in play.

Investors remain divided on whether the U.S. Crypto Reserve will be a turning point or a top signal, but one thing is clear — crypto markets are entering a high-stakes phase that could define 2025.