🌎 Crypto Markets Recover Amid Pro-Crypto Regulation Hopes

Crypto Markets Recover as Anticipation for Pro-Crypto Regulation Brews in 2025

Crypto markets are showing signs of recovery from a recent correction, with Bitcoin regaining its footing above $96,000 after a drop to $92,000 on December 31. The anticipation for pro-crypto regulation and policy in the U.S. is also influencing the market, with the President-elect’s inauguration just around the corner.

On-Chain Metrics Support Gains in Bitcoin, XRP, and Solana

Open interest, a key indicator of demand for a crypto token, has increased for Bitcoin, XRP, and Solana since the December 31 low. This rise in open interest supports a bullish thesis, indicating that derivatives traders’ appetite for these tokens has increased in the first three days of January.

Solana’s social dominance is also on the rise, with the token recording increasing mentions across social media platforms and a steady rise in volume traded on exchanges. Additionally, the funding rate aggregated across derivatives exchanges has been positive for the last five days, indicating optimism among traders.

XRP has observed a decline in large volume transactions, which could reduce the profit-taking streak in the token. However, the Network realized profit/loss metric shows a consistent profit-taking streak since November, which could end as whales slow down their activity.

Bitcoin’s funding rate has been positive for the last ten days of December and the first three days of January, indicating an optimistic outlook among derivatives traders.

MicroStrategy’s Declining NAV and Institutional Investment Concerns

Institutional capital inflow to Bitcoin is in decline, with net flows to U.S.-based spot BTC ETFs suffering since the last week of December. This decline in institutional investment could affect the token’s price in 2025.

MicroStrategy, one of the largest public holders of Bitcoin, has recorded a nearly 44% decline in its shares from their peak. The demand generated by the narrative of corporates adopting Bitcoin as a treasury asset is waning.

Solana and XRP Face Hurdles Amidst Hopes of ETF Approval

Solana’s meme coin narrative is losing steam, with a decline in airdrops and reduced network activity. The token’s stablecoin market capitalization also lags behind Ethereum.

XRP faces hurdles amidst the anticipation of a changing tide of crypto regulation and policy in the U.S. The Securities & Exchange Commission’s appeal in the Ripple lawsuit lingers, and traders remain hopeful that a new SEC Chair could remedy the situation.

Technical Analysis and Targets

Bitcoin’s weekly price chart shows an upward trend, with technical indicators supporting gains in the token. The moving average convergence divergence flashes green histogram bars above the neutral line, indicating positive momentum.

XRP is currently nearly 20% away from its peak, facing resistance at the December 9 high. The imbalance zone between $1.63 and $2.17 could act as support for XRP if there is a correction in price.

Solana’s weekly chart shows the altcoin in an uptrend, close to the 78.6% Fibonacci retracement level of its rally. The $200 level remains a key milestone for SOL.

Pump.fun Continues to Dump SOL Tokens

On-chain analysis shows that Pump.fun, the launchpad on Solana, continues to offload its SOL token holdings. The launchpad’s wallet has deposited millions of SOL tokens to Kraken and sold millions of dollars worth of SOL tokens.

This selling pressure could increase if Pump.fun doesn’t end its streak soon. Traders need to watch whale activity and Solana supply on exchanges to predict any upcoming correction in SOL price.