Crypto Market Correction: Altcoins Rebound After Trump Policy Rally
Tuesday morning saw altcoin prices pulled back after a week-long rally fueled by President Trump’s stablecoin legislation. Key tokens including Ethereum (ETH) and Dogecoin (DOGE) reversed earlier gains, marking a market “cooling off period” following euphoria over the stablecoin framework.
In Brief
- Altcoins slipped Tuesday morning as stablecoin-friendly policy hopes faded, with Ethereum (ETH) and Dogecoin (DOGE) giving back recent Trump-driven rally gains.
- Hedera (HBAR) led top-20 cryptocurrency losses (-5.2%), followed by Hyperliquid (HYPE) (-5.1%) according to CoinGecko.
- Analysts described the pullback as a “healthy correction,” pointing to profit-taking, overbought signals, and preceding XRP momentum.
- Bitcoin showed resilience, slightly up near $119,000.
Following President Trump’s signature of landmark stablecoin legislation, altcoins surged last week. This catalyst-driven rally pushed XRP to an all-time high and elevated expectations across the crypto sector. However, the market is now showing signs of consolidation and profit-taking as valuation adjustments occur.
This correction comes after XRP hit an all-time high above $3.41. Analysts attribute the sustained rally to renewed institutional interest accompanying the “crypto-friendly” policy signals.
“Healthy Correction” Following Euphoric Gains
“The pullback appears to be a healthy correction following strong double-digit gains in recent weeks,” Illia Otychenko, Lead Analyst at CEX.IO, told Decrypt.
“Following such rallies, short-term profit-taking is common once momentum indicators like the daily RSI reach overbought territory,” he added.
Otychenko noted that “rather than signaling weakness, such corrections could be necessary to solidify foundations for a sustained rally,” referencing ETH’s declining selling pressure and XRP’s formation of a “Golden Cross” pattern.
Arthur Azizov, founder of B2 Ventures, described the recent rise as uninterrupted. “At this stage, a correction seems normal,” he stated. “The ideal zone looks around $2.64 and $1.90 must remain a strong support level,” adding it signals further upside potential.
Post-Euphoria “Hangover” Amid Regulatory Catalysts
Market watchers describe Tuesday’s pullback as a “natural pause” after last week’s headline-driven euphoria, ahead of Federal Reserve Chair Powell’s final public address before the blackout period.
“Following headlines, this pullback seems more a hangover than structural shift,” MEXC’s Shawn Young explained. “Approaching Bitcoin’s altcoin open interest is another indicator of correction risk when positioning becomes aggressive.”
Young also noted spot selling pressure has expanded beyond Binance to Coinbase, signaling broad-based derisking.
Fed Uncertainty Adds Market Pressure
The market correction coincides with market attention shifting toward Federal Reserve policy. Analysts say the Fed’s upcoming address could significantly affect positioning across both traditional and crypto markets.
“Markets still lean toward September cuts (56% probability according to FedWatch), but Powell’s tone could further influence risk sentiment,” Young said.
Rumors of President Trump drafting a Fed chair “shadow” successor to pressure for faster cuts could amplify market caution.
