Crypto Market Outlook: A Cautious Signal from the S&P 500 for Bitcoin

By Omkar Godbole (All times ET unless specified otherwise) The year 2025 has just begun, yet a notable divergence is already apparent between bitcoin and the S&P 500. Bitcoin is striving to establish a strong presence above $100,000, with its Deribit-listed options indicating a bullish trend. In contrast, the S&P 500, which historically provides cues for risk assets including bitcoin, is exhibiting caution. According to data from Cboe, the SPX options skew now suggests greater downside risk compared to the same period last year. The defensive stance in the stock market may be attributed to concerns that the upcoming inauguration of President-elect Donald Trump on January 20 could trigger a 'sell-the-news' event. The past two months have seen increased risk-taking across financial markets in anticipation of Trump's pro-corporate and pro-economy reforms, making profit-taking a plausible scenario. "Generally, we observe some weaknesses in the data and believe that Trump's inauguration this month has a decent chance of being a 'sell the news' event, following nearly three months of unchecked economic optimism across most sectors," stated Bruce J Clark, head of rates America at Informa Connect, on LinkedIn. This raises questions about bitcoin's potential reaction. Given the expectations of regulatory clarity under Trump, the cryptocurrency has already rallied from $70,000 to over $100,000 in just two months. A broader market sell-off on January 20 could potentially support bitcoin by pulling down the dollar index and bond yields. Several factors are currently supporting bitcoin. For instance, the $400 billion in liquidity withdrawn from the system in the final two weeks of 2024 is likely to return, which could boost asset prices, as noted in the LondonCryptoClub newsletter. Additionally, some capital flows from China may find their way into cryptocurrencies. Bitcoin is again trading at a premium on Coinbase, reflecting stronger demand in the US, while miners are expected to reduce their sales. According to analysts at Bitfinex, 'The Net Unrealized Profit and Loss (NUPL) for miners remains very positive, hovering around 0.5, indicating that miners are in a strong position with substantial unrealized profits and a preference to hold onto their BTC at this stage.' In the broader market, some traders are exploring December 2025 ETH calls at strikes as high as $11,000, with Ether currently trading below $4,000. Over 70 of the top 100 coins by market value were up on a 24-hour basis at the time of writing, further evidence of a risk-on attitude. However, it's essential to keep an eye on the bond market rout, which is rapidly spreading beyond the US. Earlier today, the Japanese 10-year bond yield rose to a 13-year high, while its 30-year British counterpart was on the verge of hitting its highest level since the late 1990s. This could potentially undermine risk assets. Stay vigilant! Key Events to Watch Token Events Conferences Token Talk By Shaurya Malwa: Ethereum co-founder Vitalik Buterin has sold a stash of memecoins sent to him by various communities to support a charity, as indicated by on-chain data. Over the past two days, Buterin has sold $940,900 worth of lesser-known memecoins for the USDC stablecoin and ether. The NEIRO, ESTEE, MARVIN, EBULL, MSTR, and TERMINUS tokens brought in at least $57,000 worth of USDC, while other tokens were sold for less than $40,000. Just over $916,000 was transferred to a multisign wallet, likely tied to the charity Kanro, according to SpotOnChain. Communities often send tokens to Buterin to gain exposure and leverage his influence in the crypto space. However, Buterin's known philanthropy also plays a role, as communities send tokens expecting him to donate them, indirectly supporting charity. In October, Buterin stated that he would donate any tokens sent to him to charitable causes, although he expressed his preference for communities to send donations directly to charity. Derivatives Positioning Market Movements Bitcoin Stats Basket Performance Technical Analysis Crypto Equities ETF Flows Spot BTC ETFs Spot ETH ETFs Source: Farside Investors Overnight Flows Chart of the Day While You Were Sleeping In the Ether