Delve into our comprehensive expert analysis concerning the SEC’s anticipated actions and the ramifications these could have on XRP’s trajectory in the near future.

Bitcoin Dips Below $90K, Rebounds on Policy Rumors

In contrast, the cryptocurrency market experienced a tumultuous session on January 13, particularly impacting bitcoin (BTC). In a significant downturn, BTC fell below the $90,000 mark for the first time since November 18, a period characterized by a bull run that had aimed towards reaching an all-time high of $108,231. This decline raised concerns among investors and analysts alike.

However, the pullback proved to be short-lived as savvy dip buyers stepped in to capitalize on lower prices, prompting a rebound in the value of bitcoin. This rally coincided with rising speculation regarding upcoming pro-crypto executive orders from the Trump administration, which created a renewed sense of optimism within the market.

On the following Monday, BTC made strides in recovering its earlier losses as rumors circulated that Trump was contemplating crypto-related executive orders on his first day in office. A key potential move could involve overturning President Biden’s veto regarding the SEC’s SAB 121 regulation vote, which has drawn considerable attention from both supporters and detractors in the blockchain community.

For context, Staff Accounting Bulletin 121 (SAB 121) mandates companies, particularly financial institutions, to maintain crypto assets on their balance sheets—even if those assets are held under customer custody. President Biden’s veto effectively hindered a bipartisan effort to shift this requirement, which has considerable implications for how institutions manage and report their digital asset holdings.

The volatility observed on Monday was further compounded by the looming inauguration of Trump and the speculation surrounding the establishment of a potential United States Strategic Bitcoin Reserve (SBR). The interaction between supply and demand dynamics remains crucial in this context, as it could significantly temper the impacts of a more stringent monetary policy from the Federal Reserve, possibly leading to elevated borrowing costs for investors.

During Monday’s fluctuations, Bitwise, a notable US BTC-spot ETF issuer, drew attention to existing demand within the US market. They remarked,

“We polled advisors across the country, and only 35% said they are able to buy crypto in client accounts today. Worth noting: Advisors manage roughly half of all wealth in America. There’s still a lot of room to run.”

This survey conducted by Bitwise with over 400 US financial advisors showcased a marked interest in cryptocurrencies. Most notably, they found that,

“99% of advisors who currently have an allocation to crypto in client accounts plan to either maintain or increase that exposure in 2025.”

Bitcoin Price Outlook

On January 13, Bitcoin experienced a dip of 0.10%, which slightly reversed the previous day’s gain of 0.05%, ending the session at $94,493. Analysts continue to discuss the factors driving BTC price trends, which are highly contingent on various elements such as US economic indicators, the flow of the BTC-spot ETF market, and developments regarding the proposed Strategic Bitcoin Reserve (SBR).

Should US inflation data scheduled for release on January 15 exceed expectations, it may adversely impact speculations regarding a potential Federal Reserve rate cut in the first half of 2025. An assertive stance from the Fed could incite outflows from spot ETFs, creating potential headwinds for bitcoin demand moving forward.

Nonetheless, progress towards establishing a US SBR could mitigate the bearish sentiment associated with a more hawkish Fed policy, possibly allowing BTC to realize new highs. Conversely, if the proposal for an SBR encounters substantial bipartisan resistance, BTC risks breaking below the critical support level of $90,742—an event that could trigger further anxiety among investors.

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