Bitcoin has recovered to trade above $97,000, while the overall cryptocurrency market capitalization reached approximately $3.40 trillion. President-elect Trump may initiate pro-crypto regulations on his first day in office. Ripple has recently supported wildfire relief efforts and anticipates significant SEC developments, which could positively affect XRP inflows. Additionally, Bitcoin’s increasing correlation with stock markets might compromise its status as a portfolio diversifier.

Bitcoin (BTC) is currently showing signs of recovery, trading above $97,000 after testing the key psychological level of $90,000 earlier this week. Market participants are advised to monitor the upcoming release of the US Consumer Price Index (CPI) data, as it may introduce volatility into Bitcoin’s price movement.

The cryptocurrency market has experienced an overall increase of 3% within the last 24 hours, raising the total market capitalization to approximately $3.40 trillion. This figure represents a significant resistance level established at the end of December, and further market trends are expected to be influenced by the impending US inflation data release.

According to recent reports, President-elect Donald Trump is preparing to endorse cryptocurrency regulations through an executive order on his inaugural day in office. Discussions suggest that Trump, guided by his incoming crypto advisor David Sacks, is collaborating with leaders in the cryptocurrency sector to formulate policies aimed at reducing excessive banking regulations.

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Bitcoin and Ethereum have recently rebounded, aided by key support levels identified earlier in the week. Meanwhile, Ripple (XRP) has continued to show strength, finding support along the upper boundary of its symmetrical triangle, amid positive developments affecting its ecosystem.

Ripple furthered its charitable efforts by contributing $100,000 to relief measures for California wildfires; this has also influenced XRP investors, who are anticipating the SEC’s opening brief. Notably, a positive forecast from JP Morgan suggests significant inflows into an XRP ETF that could exceed $8 billion if approved.

Bitcoin’s rising correlation with traditional stock markets is becoming increasingly apparent, potentially diminishing its role as a portfolio diversifier. Such correlations have been particularly notable in the wake of macroeconomic data releases, which have drawn similar responses from both Bitcoin and the S&P 500.

On January 14, Bitcoin’s price reclaimed the $97,000 resistance level, contributing to a 2.4% increase in the overall cryptocurrency sector, which surpassed a market capitalization of $3.3 trillion. Technical indicators suggest potential upward movement ahead for Bitcoin.

The cryptocurrency landscape is seeing dynamic changes with Bitcoin recovering after a recent decline. Market trends link cryptocurrency performance to broader economic data, particularly the US CPI, which may drive volatility. Additionally, regulatory changes, particularly under new presidential leadership, have the potential to reshape the industry, thus affecting investor confidence and market movements overall. The affinity between digital currencies and traditional equity markets is being closely observed, influencing long-term investment strategies.

The current state of cryptocurrency highlights key developments, including Bitcoin’s recovery and expectations surrounding US economic indicators. The proactive stance from political leaders regarding cryptocurrency regulation, alongside Ripple’s charitable initiatives and anticipated SEC actions, showcases the evolving nature of the market. Investors should remain vigilant due to the potential influence of inflation data and increased stock market correlations affecting Bitcoin’s diversification role.

Original Source: www.fxstreet.com

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