As the new year approaches, will three major catalysts drive a strong market rebound in January?
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As the new year approaches, will three major catalysts drive a strong market rebound in January?
Trump's inauguration as the new president, FTX commencing debt repayments, and the historical trend of broad gains during Lunar New Year.
Navigating Web3 tides with focused insightsBy 1912212.eth, Foresight News
The crypto market has experienced significant volatility this month. After initially breaking above the $100,000 mark on December 5, it saw a dramatic pullback on December 9–10. Since then, prices have slowly and shakily climbed higher. Just as investors began to expect BTC to break through $110,000, Federal Reserve Chair Powell’s hawkish remarks dealt a heavy blow to the overheating market. Altcoins, led by Ethereum, suffered a bloody correction—some altcoin prices are now nearly half their monthly highs.
Panic has spread among crypto investors, with anxiety and unease prevailing across the community.
Countless investors are asking: Is the bull market really over? What will happen next? While market movements are inherently unpredictable, what catalysts can we expect in January? And why should we remain optimistic about January's performance?
1. Trump to Be Inaugurated on January 20
Following Trump’s successful presidential campaign in early November, the market entered a sustained one-month rally. Trump has presented himself as pro-crypto, and many of his cabinet nominees are known supporters of the crypto industry. Additionally, the long-criticized SEC chair is set to step down, further fueling widespread optimism about the future of crypto.
Latest data shows that the incoming Congress features a significantly higher proportion and number of pro-crypto lawmakers compared to the previous session.
According to a recent Reuters report, Michael Rosen, Chief Investment Officer at Angeles Investments, said Trump’s inauguration could bring market surprises. He is expected to issue at least 25 executive orders on his first day in office, covering immigration, energy, and crypto policy.
The market will be closely watching Trump’s every move regarding crypto. If he follows through on his campaign promises, the crypto industry may enter its golden era.
2. FTX to Begin Debt Repayment
On December 17, FTX and its affiliated debtors announced that their court-approved Chapter 11 reorganization plan will officially take effect on January 3, 2025.
The first round of distributions will begin within 60 days of the effective date and will initially target approved claimants in the Convenience Classes. FTX has partnered with cryptocurrency custodian BitGo and exchange Kraken to facilitate asset distribution for retail and institutional customers.
Data disclosed by HODL15Capital indicates that the initial repayment under the FTX plan includes $16 billion in cash.
Previously held tokens from FTX/Alameda, such as SOL and WLD, have largely been sold off.
Creditors will receive cash compensation rather than tokens, which indirectly reduces market selling pressure and increases the likelihood that recovered funds will flow back into the crypto market—potentially boosting market sentiment.
3. Bitcoin Tends to Rise During Lunar New Year Month
As early as February 2024, Markus Thielen, founder and head of research at 10X Research, noted that Bitcoin typically rises around 11% during the Lunar New Year period. Over the past nine years, traders who bought Bitcoin three days before Lunar New Year and sold ten days after have consistently achieved solid returns.
February 10 marked the 2024 Lunar New Year. Bitcoin rose precisely from around $43,000 on February 5 to nearly $53,000 by February 15. Afterward, the uptrend continued, reaching a peak of $72,000 on March 15.
Lunar New Year fell in early February in 2021, 2022, and 2024, while in 2023 it occurred at the end of January. The chart clearly shows that BTC posted gains of over 10% during the Lunar New Year month in each of these years, with the highest surge reaching an astonishing 43.55%.
The 2025 Lunar New Year falls on January 29—earlier than usual and shifting the potential rally into January.
Markets often fulfill self-fulfilling prophecies, such as the so-called “October rally.” Given historical patterns, the Lunar New Year effect is worth anticipating.
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