The first week of March has seen significant market volatility. Unexpected news from President Trump, including plans to include altcoins in US crypto reserves and new tax policies, has influenced capital flows. As a result, liquidation volume surged to $1 billion.

Liquidation maps for several altcoins indicate an imbalance. This could signal the potential for major liquidations.

The 7-day liquidation heatmap for XRP suggests that if the price drops below $2, total long liquidations could exceed $215 million.

Chart data indicates that traders are leaning more towards long positions on XRP rather than shorting it. As of now, XRP is trading around $2.33 after a 20% decline since March 3.

Whale Alert reported that on March 3, 500 million XRP was unlocked from escrow. This happened right after President Trump announced that XRP would be part of the US crypto reserve.

Additionally, on-chain investigator ZachXBT revealed that Ripple co-founder Chris Larsen still holds over 2.7 billion XRP (worth $7.18 billion). Addresses linked to him moved over $109 million worth of XRP to exchanges in January 2025.

These developments could raise concerns and potentially trigger a liquidation event.

The 7-day liquidation heatmap for Solana (SOL) indicates that long liquidations could surpass $437 million if SOL drops to $120. This would mark an additional 11% decline from its current price of $136.3.

On-chain tracking account Lookonchain recently reported that a wallet linked to FTX/Alameda, holding 3.03 million SOL (worth $431 million), has begun transferring SOL to Binance.

“Of the 3.03 million SOL ($431.3 million) unstaked by FTX/Alameda today, 24,799 SOL ($3.38 million) has been deposited to Binance,” Lookonchain reported.

Although the amount transferred to Binance is less than 0.1% of the total holdings, investors might speculate that more SOL will follow. This could create selling pressure and trigger further liquidations.

The 7-day liquidation heatmap for Cardano (ADA) suggests that short liquidations could exceed $50 million if ADA surpasses $0.90. This represents a 10% increase from its current price of $0.81.

While ADA’s liquidation volume is lower than XRP or SOL, it is the most volatile among the three. According to Kaiko’s latest report, ADA has the lowest market depth among the five altcoins included in the US crypto reserve.

Market depth measures liquidity, indicating the market’s ability to absorb large buy or sell orders without significant price fluctuations.

“Notably, ADA lags all other assets in the strategic reserve and could see the strongest price impact,” Kaiko reported.

Therefore, in the face of similar market shocks, ADA is likely to experience the highest volatility, increasing the risk of liquidation.

Liquidation maps continuously adjust to price movements. However, current data reflects a highly sensitive market, with unpredictable news increasing risks for short-term traders—especially those using high leverage.

As the inaugural crypto summit looms, speculation swirls around a potential policy overhaul. At the center of this excitement is the realization of Eric Trump’s zero crypto tax policy, which has sparked a heated debate. The key point of contention is whether Donald Trump will abolish the crypto capital gains tax, a move that could have far-reaching implications for the industry.

Let’s dive into the ongoing debate surrounding the implementation of the zero crypto tax policy and its potential implications.

Will Donald Trump Eliminate Capital Gains Crypto Tax?

Interestingly, Adam Cochran, founder of Cinneamhain Ventures, has poured cold water on growing speculation about the introduction of a zero crypto tax policy in the United States. In his recent X post, Cochran stated that President Donald Trump could not “unilaterally change the tax code.” He added that any amendments to the related laws fall under the jurisdiction of Congress.

According to Cochran, only Congress has the power to make such laws, which is explicitly stated in the Constitution. He added, “Even if the President announced it, or tried to sign an EO for it, that wouldn’t make it law.”

Cochran further pointed out the necessity of understanding the separation of powers in the US government and the role of Congress in shaping tax policies. He also highlighted the basic need for civic education, which could indeed help citizens understand and differentiate between powers.

White House Summit Weighs Zero Tax

President Donald Trump is set to host the first-ever White House Crypto Summit on March 7, 2025 (Friday). While Crypto Czar David Sacks chairs the summit, the Working Group’s Executive Director Bo Hines will administer it. In a recent announcement, the Office of Communications stated,

Attendees will include prominent founders, CEOs, and investors from the crypto industry, as well as members of the President’s Working Group on Digital Assets.

As Trump aims to transform the US into a crypto capital, the community eagerly anticipates groundbreaking policy announcements at the upcoming summit. One such anticipation is the zero crypto tax policy, proposed by Eric Trump. Though the potential implications of this policy shift remain uncertain, the community expects significant benefits from the proposed zero crypto tax policy.

Will Donald Trump’s Possible Zero Crypto Tax Policy be a Boon?

Recently, Eric Trump proposed the idea of a zero crypto tax policy, arguing that it could boost innovation, investments, and the US’ crypto lead. Though Eric Trump isn’t a policymaker, the community views his opinions as the reflection of the current administration. Many believe that Trump will implement the proposal, driven by his solid support for the crypto industry. Amidst many anticipated policy reforms in the upcoming crypto summit later this week, the introduction of a zero crypto tax policy is also widely anticipated at the summit.

However, with the details of the zero crypto tax proposal still under wraps, ambiguity and uncertainty persist. The idea’s scope is vague as it is unclear if it would apply to all cryptocurrencies. It is also not known whether the policy would include both short-term and long-term gains. Furthermore, the level at which the zero tax would apply – individual or business – remains unspecified.

Moreover, implementing the proposal could have far-reaching consequences. For example, the crypto market may experience extreme volatility and a potential downturn in the short term. Given the current uncertainty surrounding US regulatory frameworks, this may not be the optimal time for such a radical policy overhaul.

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Nynu V Jamal

Nynu V Jamal is a passionate crypto journalist with three years of experience in blockchain, web3, and fintech spheres. She has established herself as a knowledgeable and engaging voice in the cryptocurrency and blockchain space. Her experience as an Assistant Professor in English Language and Literature has further added to her quest for crafting informative, well-researched, and accessible content.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.