Analyzing Markets as January Draws to a Close... Trump Inauguration Hangover?

It has been a wild ride here in January, with markets fluctuating up and down. Donald Trump was sworn in as the 47th U.S. president on January 20, 2025. His strong support for crypto, including plans to make the U.S. a leader in blockchain technology and to establish a national Bitcoin reserve, had already boosted confidence in the market. It's widely believed that most of the pumps that have occurred since November 5th were due to Trump being officially being elected. Bitcoin had hit a record high back in November 2024 when he was elected, and it climbed again to the new current all-time high of $109,300 just hours before his inauguration took place.

With this said, the past week has had some pretty heavy bleeding as the euphoria over Trump's new tenure has come and gone, and traders now are witnessing the true test of the pro-crypto presidency.

While there are some exceptions of altcoins thriving over the past week (such as Mantra, Ondo Gate, Movement, and Jupiter), the vast majority of coins that have gotten hit the hardest during this retrace have been mid and small caps.

On the 30-day timeline, market caps look much more mixed, with altcoins very much uncorrelated from one another. Bitcoin's price is down just -5.1% from its all-time high at the time of this writing, currently sitting at $102,600. We say "just" because the crowd has displayed a surprising amount of panic from this modestly sized retrace.

XRP, as we can see above, is a notable strong performer over this past 30-day stretch, gaining a massive +51% market cap increase during this stretch. There are a few explanations as to why it has decoupled from most other projects, price-wise:

• Ripple Labs received final approval from the New York Department of Financial Services for its stablecoin, RLUSD, pegged to the U.S. dollar. Due to this regulatory milestone, Ripple's digital payment platform has already brought in more users. With this RLUSD adoption, the adjacent (and most notable) project for Ripple Labs has benefited and caused XRP's value to rise.
• XRP has recently been recognized by more major financial institutions and its integration into various payment systems have bolstered investor confidence. Among these has been Ripple's partnership with Ondo Finance, allowing tokenized U.S. Treasury securities to the XRP Ledger.
• Financial expert Louis Navellier highlighted that XRP's recent price surge is partly influenced by its growing recognition among major financial institutions, including the Federal Reserve. This acknowledgment has strengthened investor confidence, as it signals increased institutional adoption and potential integration into mainstream financial systems. As more banks and payment networks explore using XRP for cross-border transactions, its demand and credibility in the market continue to rise.

Regarding the aforementioned sentiment swings from traders across social media, here is a look at how some of the top caps have fluctuated in traders' minds based on the roller coaster movement of late:

The lowest Bitcoin sentiment of 2025 occurred just a few days ago, after crypto's #1 market cap dropped below $100K and striking fear in traders that have been FOMO'ing in near the all-time highs from last week. The gold bars on the chart below represent the ratio of positive vs. negative comments across Reddit, X, Telegram, 4Chan, Farcaster, and BitcoinTalk:

Meanwhile, the sentiment toward Ethereum has been declining throughout the past month as the asset has continued to underperform relative to other top caps. The $3K support level has been a major talking point, and ETH has twice teased going below this threshold in just the past three days.

XRP's sentiment has been a bit more rosey, but even one of the best performers of 2025 has started to gain some skeptics. Since most of the #3 market cap's gains have come in the first half of the month, the ever-impatient crypto community has turned a bit sour after so much euphoria was evident as the asset rose.

And finally, Solana somehow managed to see its lowest sentiment in a full year directly after the asset topped out at just below $300 right before Trump's inauguration. The -18% retrace that occurred in less than 24 hours on January 19th caused quite a stir, specifically because it coincided with some unreliability and temporary outages on the SOL network. But with these transfer issues resolved, we could see a quick flip back to positivity for the crowd, especially if the #4 market cap regains the $250 support level shortly.

As far as other topics to keep an eye on as we head into February, keep an eye on MicroStrategy's consistently reported further purchases of Bitcoin. In January alone, these were some of the well documented accumulations by Saylor's firm:

• January 6, 2025: Acquired 1,070 BTC
• January 13, 2025: Acquired 2,530 BTC
• January 21, 2025: Acquired 11,000 BTC
• January 27, 2025: Acquired 10,107 BTC

Not to be forgotten, this month also marked the one-year anniversary of the launched Bitcoin ETF's. January 23rd was a notable day, as the top 7 largest ETF's managed a massive $7.9B in trading volume, their largest single day since March 14, 2024.

Overall, it is widely believed that cryptocurrency has a bright future, particularly under new initiatives from Trump. Ideally, we will see optimal buying opportunities when the crowd begins to show serious impatience. If we see another week of sideways or negative price action, you may very well be able to buy some cheaper retail tokens from those who aren't used to seeing anything other than price rises (based on how these past three and a half months have gone). Trade safely, and we'll continue to update you on further developments as the calendar turns to February.

-----

Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.