As the New Year approaches, will the three major catalysts drive a strong market rebound in January?
Trump's inauguration as the new president, FTX begins debt repayment, and the historical data pattern of general increases during the Lunar New Year.Author: 1912212.eth, Foresight News
The cryptocurrency market has experienced significant volatility this month. After first breaking the $100,000 mark on December 5, it faced a dramatic pullback from December 9 to 10. Following this, the market slowly oscillated upward. Just when investors thought BTC would break through $110,000, Fed Chair Powell's hawkish remarks delivered a heavy blow to the warming market, leading to a bloody correction in the altcoin market, particularly Ethereum, with some altcoins nearly halving from this month's peak.
Panic among crypto investors is spreading, with anxiety and unease filling the community.
Countless investors are asking: Is the bull market really over? What will the future market look like? Although the market is unpredictable, what catalysts can we expect in January? Why is January's performance worth looking forward to?
1. Trump to be inaugurated on January 20
After successfully campaigning for president in early November, Trump ushered in a month-long rally. He has presented a crypto-friendly stance, and many of his nominated department heads are also pro-crypto figures. The SEC chair, often criticized, is also set to leave, leading the market to generally hold an optimistic view of the future of the crypto market.
Recent data shows that the new incoming legislators are significantly more supportive of crypto compared to the previous session.
According to a recent Reuters report, Angeles Investments Chief Investment Officer Michael Rosen stated that Trump's inauguration could bring some surprises to the market, as he is expected to issue at least 25 executive orders on his first day in office, covering a range of issues from immigration to energy and cryptocurrency policy.
The market is closely watching Trump's every move regarding the crypto market. If he can fulfill his campaign promises, the crypto market may usher in its own golden era.
2. FTX to begin debt repayments
On December 17, FTX and its affiliated debtors announced that the Chapter 11 reorganization plan approved by the court will officially take effect on January 3, 2025.
The first round of distributions will start within 60 days after the effective date, aimed only at approved creditors in the Convenience Classes. FTX has reached agreements with cryptocurrency custodian BitGo and trading platform Kraken to provide asset distribution services for retail and institutional clients.
According to data disclosed by HODL15Capital, the first round of repayment distribution, effective on January 3, includes $16 billion in cash.
Previously, some tokens held by FTX/Alameda, such as SOL/WLD, have been largely sold off.
Creditors will receive compensation in cash rather than tokens, indirectly reducing market selling pressure and increasing the likelihood of some compensation funds flowing back into crypto, thereby boosting market sentiment.
3. BTC generally rises around the Lunar New Year
As early as early February 2024, Markus Thielen, founder and research director of 10X Research, noted that Bitcoin often rises by 11% around the Lunar New Year. Over the past nine years, traders who bought Bitcoin three days before the Lunar New Year and sold it ten days after have seen good returns.
February 10 marks the 2024 Spring Festival, and Bitcoin is expected to rise from $43,000 on February 5 to around $53,000 by February 15, continuing to climb thereafter, reaching a peak of $72,000 on March 15.
The Spring Festivals of 2021, 2022, and 2024 all fall in early February, while the 2023 Spring Festival occurred at the end of January. The chart above clearly shows that BTC's upward trend in the month of the Lunar New Year has consistently exceeded 10%, with the highest reaching an astonishing 43.55%.
The 2025 Spring Festival is on January 29, which is earlier than in previous years.
The market often has self-fulfilling prophecies, such as "October rises," making the performance around the Lunar New Year worth looking forward to.
