Biweekly Market Report: Crypto's Volatile Moves to Ring in the New Year; Whales HODLing Strong, Retails Showing FUD

Beginning with this report, you will be seeing bi-weekly market updates we publish in collaboration with articles we are publishing alongside Bybit. Catch all of our reports both here and on their website!

After a worrisome end to 2024, as a few clever traders predicted with whale profit-taking (for tax purposes) seeming likely, 2025 started off with a much-needed rebound.

However, Bitcoin has been struggling to crack the much-coveted $100K psychological resistance level as the crowd has been growing restless once again. It has been approximately three months now since this latest uptrend in this bull cycle began, and it was largely ignited by enormous accumulation from wallets holding between 100 and 1,000 Bitcoin. But since December 18, 2024, this group’s buying has come to a halt.

Many observers are also anticipating that Donald Trump’s official inauguration will be a boost to crypto,regardless of their own opinions on whether or not he will be an adequate leader of the US. Traders,regardless of their voting, have been well aware of his pro-crypto stance over the previous year, and have acknowledged how much institutionals have positively reacted to him being elected.However, other red flags are on traders’ minds as we proceed into the new year. Following a year in which Bitcoin more than doubled its market cap, some experienced traders have expressed concern for potential “regression to the mean,” similar to what crypto experienced in 2018 and 2022.

There are also conversations about the U.S. Fed’s interest rate cuts soon coming to a halt, after the hawkish stance taken by Fed Chair Jerome Powell at the last FOMC meeting. If we take a look at the past 30 days of social volume, we can see that discussion rates have come down considerably on social media, now that the euphoria from the pro-Trump crowd has died down as prices dipped.

Most cryptocurrencies have fallen in market cap during this time period, with notable exceptions being Sui, Hyperliquid, Bitget Token and Virtuals Protocol. Nevertheless, when it comes to cryptocurrency, there’s much ahead to watch during what will surely be a polarizing year. Following are some of the topics that will be driving markets in the upcoming weeks and months.

Trump’s Inauguration: Crypto Policy Shifts Should Be Game-Changers, But Are They Already Priced In?

With Donald Trump’s upcoming inauguration as the 47th president of the United States, cryptocurrency markets are already experiencing volatility in anticipation of major policy shifts. Trump’s plans to establish a U.S. strategic Bitcoin reserve, along with the appointment of pro-crypto figures, such as Paul Atkins and David O. Sacks, have drawn significant attention. These announcements align with a substantial uptick in institutional confidence and activity. As previously mentioned, however, the discussions around the United States’ next president have died down as a major topic of interest for the time being. Here is the social volume of Donald Trump on the three largest social media platforms:

Regardless of the lull in discussions, Trump’s legislative proposals such as the BITCOIN Act of 2024, which aims for the United States government to acquire 1 million BTC over five years, should continue to help fuel speculative interest once he is inaugurated on January 20, 2015.

The big question, however, is whether Trump taking office will have any immediate impacts on market caps once his inauguration is made official. The ‘buy the rumor, sell the news’ effect can take many forms, just as we saw one year ago when Bitcoin ETFs were approved, and crypto markets actually dropped for the next two weeks (to retail’s astonishment).

In this case, even though it has now been 9 weeks since Trump was elected, the ensuing bull rally was a reaction to what would be a foregone conclusion in late January… not what would be an instant shift for him to take power. So in essence, we must remember that Bitcoin exceeded $100K due to the anticipation of what the next four years would look like. An event that is already known to occur can sometimes have adverse effects compared to what the crowd believes should be a ‘bullish’ moment for crypto. So we advise caution as this inauguration date both comes and goes.

China’s Tightening Crypto Regulation

While the U.S. appears to be embracing cryptocurrency innovation, China is moving in the opposite direction. Recent regulatory changes have banned private Bitcoin ownership, redirecting resources toward the adoption of the digital yuan. Since this announcement, Bitcoin trading volumes on Chinese exchanges have dropped by 18%, while digital yuan transactions have surged by 32%, according to blockchain monitoring tools.

Additionally, mining activity has shifted dramatically, with hash rate contributions from China declining by 9% in December 2024 alone. The global redistribution of mining operations could alter Bitcoin’s decentralization metrics, potentially impacting network security and transaction speeds.

Breaking Correlations: Bitcoin and the S&P 500

One of the more intriguing trends at the start of 2025 is the apparent decoupling of Bitcoin’s price movements from the S&P 500. Historically, these two markets have demonstrated a correlation coefficient of 0.65, signifying a moderately positive relationship. However, data from the past two weeks shows this correlation dropping to just 0.18. While traditional equity markets faced declines of 3% in response to U.S.-China trade tensions, Bitcoin’s price rose by 5% during the same period.

This divergence suggests that Bitcoin may be establishing itself as a more independent asset class, driven by factors such as regulatory developments and institutional adoption rather than broader macroeconomic trends.

Whale Activity Calms Down... For Now

On-chain analytics reveal a significant cooldown in whale activity over the past two weeks. Wallets holding between 10,000 and 100,000 BTC have reduced their net transactions by 14%, aligning with a broader decline in market volatility. This trend contrasts sharply with the heightened whale activity observed in November and December 2024, which contributed to Bitcoin’s historic rally past $100,000.

The overall level of whale transactions has also fallen, indicating that key stakeholders are taking more of a wait-and-see approach after all of the fireworks to end the year. The amount of $100K+ whale transactions peaked at 24,728 and $1M+ transactions reached 5,949, both on December 4, 2025. But over the last week, there is an average of just 10,597 $100K+ transactions and 2,207 $1M+ transactions, respectively.

As mentioned earlier, the 100-1,000 BTC wallets were the ones mainly fueling October through the first half of December. But even though they have died down, the combined group of all wallets holding 10 or more BTC are still slightly moving up once again, reversing their small dump at the end of 2024.

Interestingly, smaller retail investors have stepped up their activity, with wallets holding less than 1 BTC increasing transaction counts by 22%. However, the number of non-empty wallets (mostly comprised of small wallets) has begun to rise again in the new year.

From a holding perspective, wallets holding less than 1 Bitcoin have collectively lost 41.9K Bitcoin since October 11, 2025. Not coincidentally, these retail traders’ decline in holdings was a promising sign that a bull market could be under way. The more they dumped, the more the crypto market cap continued to rise.

These wallets have indicated mild attempts to accumulate again post-Christmas, but have accrued a mere 945 BTC since that time. Retail traders are mainly sitting on the sidelines now. Ideally, for the bull market to continue, we would see their late-2024 dumping trend resume.

Elon Musk’s ‘Kekius Maximus’ Handle Change and Its Meme Coin Impact

Elon Musk’s social media influence remains a key driver of cryptocurrency market trends. His temporary X handle change to “Kekius Maximus” on New Year’s Eve sparked a staggering 4,800% price surge in a previously obscure meme coin, which briefly reached a market capitalization of $380 million.

Data showed a 68% increase in social media mentions of the coin within 24 hours of Musk’s handle change. This surge underscores the speculative nature of meme coins, which remain heavily influenced by cultural trends and high-profile endorsements.

MicroStrategy’s $2 Billion Bitcoin Investment Plan

MicroStrategy’s ongoing commitment to Bitcoin took another leap forward with its recent announcement to raise $2 billion for additional investments in the world’s largest cryptocurrency, per Executive Chairman and former CEO Michael Saylor’s announcement on Jan 5, 2025. This followed the company’s December 2024 purchase of 15,350 BTC at an average price of $100,386 per Bitcoin.

Blockchain data reveals that MicroStrategy now holds over 0.8% of Bitcoin’s circulating supply, solidifying its position as a major institutional player. These acquisitions have coincided with a 9% increase in Bitcoin’s hash rate, as miners ramp up activity in response to heightened demand.

Declining Volumes Across the Cryptocurrency Landscape

Despite several bullish developments, overall trading volumes across the cryptocurrency market have been declining since mid-December 2024. Daily trading volume for the top 10 cryptocurrencies dropped by an average of 13% over the past two weeks, with Ethereum (ETH) experiencing the steepest decline at 17%. Meme coins, in particular, have dropped precipitously in trading since mid-December, with speculative-driven assets no longer being a priority (for now).

This trend is mirrored in exchange data that shows spot trading volumes on major platforms like Binance and Coinbase decreasing by 15% and 12%, respectively. Analysts attribute this downturn to seasonal factors, reduced whale activity and uncertainty surrounding upcoming regulatory changes.

Average Trader Returns Creating Opportunities for Daring Buyers

Among top caps and the vast majority of altcoins, average traders active over the past 30 days are down in their portfolios by a fairly sizeable margin. According to one of Santiment’s top metrics, MVRV (Mean Value to Realized Value), the 30-day returns for every active wallet for Bitcoin (−4%), Ethereum (−6%), Cardano (−5%) and XRP Ledger (+2%) are entering opportunity zones. This means that adding on to your position or opening a new position are mathematically less risky than usual.

Historically, if these 30-day returns go as low as −15%, as we saw with Cardano at the end of 2024, there’s a very likely chance that prices will bounce. However, this would require a bit more market bleeding. It’s best to view MVRV as a probability meter: the lower it goes, the more efficient your investment is (since you’re holding an asset on which competing traders have already lost significant ROI).

How January is Likely to Shape Up

As 2025 begins, the cryptocurrency market is navigating a complex landscape shaped by regulatory shifts, institutional strategies and evolving market dynamics. From Trump’s pro-crypto policies and China’s tightening regulations to cooling whale activity and meme coin surges, these developments highlight the diverse factors currently influencing the market.

We recommend watching closely to see how whale behavior transpires, and how much “blood is in the street” (both from a negative sentiment perspective, and a pure ROI loss perspective from your fellow traders). Cryptocurrency is a zero-sum game, even if it often feels as though the mostly bullish community are all making and losing money together.

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This full article is also available on Bybit's website here!

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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.