BTC, ETH, XRP Prediction: Will Trump’s $4.5T Tax Cut Budget Push Crypto Prices Higher?

Cryptocurrency prices like Bitcoin, Ethereum, and Ripple stabilized on Wednesday after crashing by double digits a day earlier.  These coins may benefit after the House of Representatives voted for the Trump budget with over $4.5 trillion of tax cuts. BTC price was steady at $89,000, while ETH price and XRP price were at $2,490 and $2.3. So, will this budget push coins like Bitcoin, Ethereum, and Ripple higher?

Crypto Prices Stabilize as Trump Budget Passes the House

A potential catalyst for the stability in the crypto market was that Republicans voted for Donald Trump budget proposal. His deal includes $4.5 trillion worth of tax cuts and ways to slash government spending by about $2 trillion. 

Notably, the budget increased the debt ceiling by $4 trillion since this may lead to more money supply in the US. Some studies have established that Bitcoin price often tracks the global money supply. 

Meanwhile, the budget deal comes at a time when the market is raising estimates for rate cuts this year. Rate cut expectations have soared even as inflation has remained elevated, with the headline consumer price index rising to 3%. The CME FedWatch Tool estimates that rates will end the year between 375 and 400 basis points, down from the current range of between 425 and 450 bps. BTC, ETH, and XRP prices do well when the Fed is cutting rates.

BTC, ETH, XRP Price Prediction

So, how will the new Trump budget with over $4.5 trillion in tax cuts affect the top prices like BTC, XRP, and ETH?

BTC Price Technical Analysis

BTC price crashed to $85,873 on Tuesday, triggering the biggest outflows from spot Bitcoin ETFs. From a fundamental perspective, these sharp declines are often buy signals, meaning that Bitcoin may stage a relief rally soon.

The daily chart shows that Bitcoin settled at the 200-day Exponential Moving Average. Historically, BTC often bounces back, albeit slightly, after hitting this support level. For example, it dropped to the 200 EMA point of $60,000 in October last year, setting the stage for a strong rally to a record high if $109,385. 

Therefore, BTC price may stage a brief rebound since it has also formed a morning star pattern. The potential level to watch will be at $95,000. 

ETH Price Technical Analysis

ETH price also crashed as most coins dropped, leading to $914 million crypto market liquidations. While ETH has formed a death cross pointing to more downwards, it also fomed a small hammer candlestick that may point to a short-term bullish reversal. Ethereum price will need to overcome the stiff resistance at $2,852 to confirm a short-term rebound to $3,000. However, a drop below the key support at $2,318 (Tuesday’s low), will point to more downside.

XRP Price Technical Analysis

The XRP price also crashed and moved below the 50-day Exponential Moving Average. The risk is that the coin has formed a head and shoulders chart pattern whose neckline is around the $2 support level. A H&S pattern is one of the top bearish reversal signs in technical analysis. 

A drop below the neckline at $2 will point to further downside, potentially to the 23.6% retracement level at $1.6215, followed by the psychological point at $1. A move above the right shoulder will invalidate the bearish bullish Ripple price forecast.