Jan. 16, 2025

CoinDesk 20 Index: 3,827.69  +9%
Bitcoin (BTC): $99,434.65  +2.4%
Ether (ETH): $3,359.25  +4.87%
S&P 500: 5,949.91  +1.83%
Gold: $2,702.72  +0.31%
Nikkei 225: 38,572.60  +0.33%

Bitcoin had another cup of coffee, hitting $100K at the start of the Asian morning following one during the U.S. afternoon on Wednesday. BTC subsequently retreated to trade either side of $99,000, around 2.3% higher in the last 24 hours. Bitcoin remains in a consolidation pattern since hitting $108,000 on Dec. 17, putting in a series of lower highs. The spark for its next breakout may be the inauguration of President Trump on Jan. 20. The broader digital asset market, as measured by the CoinDesk 20 Index, is some 9% higher thanks to outsize gains by XRP, which climbed above $3 for the first time in seven years. 

Traders are optimistic about bitcoin again as diminishing inflationary fears coupled with President Trump's imminent inauguration seem ripe conditions for BTC to surpass its all-time high of $108,000. The first step would be breaking through the $100,000 barrier prior to the inauguration, according to Matt Mena, a crypto research strategist at 21Shares. "Trump’s well-documented support for pro-growth policies and his track record of favoring asset price appreciation further reinforces the bullish outlook for bitcoin and risk assets more broadly," Mena wrote. The bullish forecast is consistent with a rally in traditional assets, especially the Nasdaq 100, which surged over 2% on Wednesday. Meanwhile, the rally in the dollar index has stalled, offering a lifeline to risk assets, and the S&P 500 has neared the key level of 6,000.

Crypto traders are weighing the possibility of the Trump administration making pro-crypto announcements following his inauguration, particularly around plans to build a strategic BTC stockpile. Polymarket bettors are now allocating a greater than 50% chance of this occurring in 2025 for the first time. Paul Howard, a senior director at crypto market-making firm Wincent, said expected announcements related to regulating the digital assets industry, banking rules and creation of the strategic bitcoin reserve are not fully priced in. "We are positioned for a volatile week ahead with the change of administration in the U.S. expect to see some +/-10% moves across the majors such as BTC, SOL, ETH, and XRP. Pricing will reflect outcomes of announcements by the incoming President, so opportunities, likely not everything, are baked into the current price," Howard said.

XRP is witnessing the fastest observed rally since the altcoin boom of January 2018, according to a popular market analysis tool called the relative strength index (RSI). The measure oscillates between 0 and 100, measuring the speed and change of price movement over specific periods, typically 14 days or 12 months.

XRP's 14-month RSI has risen to 92, the highest level since October 2017, indicating that the momentum observed over the past 12 months is the strongest over seven years.

Rookie traders would quickly point out that RSI readings above 70 indicate overbought conditions and potential for a bull breather or correction. However, that's not necessarily the case, as RSI merely measures the speed of price changes over a specific period.

Currently, XRP-specific factors combined with broader crypto market dynamics support the bullish momentum.

Take trading volumes for example. The spot market tally has tripled to over $23 billion in the past 24 hours, validating the price surge. Meanwhile, volumes in derivatives have more than doubled to $34 billion, according to data source Coingecko and Coinglass.

- Omkar Godbole