Gate Research Institute: This round of crypto market rebound triggers the largest short squeeze since October | FED officials unanimously defend policy independence

Cryptocurrency Asset Overview

BTC (+0.91% | Current Price 96,365.4 USDT)

Bitcoin price has returned to the $96,000 level and is steadily moving along the upward channel. This round of rebound shows strong momentum both in magnitude and structure: the price started from a phased bottom area of $90,000–92,000, with a daily rebound of about 4.6%, reaching a high since late November. From a market structure perspective, spot buying is the main driving force behind this rally, followed by passive short covering in futures, further amplifying the upward trend. Meanwhile, ten Bitcoin spot ETFs have a combined net inflow of nearly 90,000 BTC, and other mainstream coin ETFs also recorded net inflows. On-chain data shows increasing participant divergence: the average size of spot orders near $90,000 has significantly enlarged, indicating that institutions or high-net-worth funds are quietly accumulating at low levels; short-term holders have turned into net sellers, with the 30-day short-term position net change falling into negative territory. Currently, Bitcoin is at a critical decision point; its subsequent movement will determine whether it breaks through $100,000 or continues to hover and consolidate at high levels.

ETH (-0.50% | Current Price 3,317.79 USDT)

After two consecutive days of strong upward movement, Ethereum broke through the key resistance level of $3,300 formed in early January, reaching as high as $3,400 intraday, and is now oscillating near $3,300. This rally is driven more by clear “hard catalysts” rather than emotional factors: on one hand, progress in related legislation drafts has boosted policy expectations; on the other hand, the macroeconomic benefits of falling inflation have collectively improved market risk appetite, driving the overall strength of crypto assets.

From a technical perspective, Ethereum on the daily chart is gradually approaching the 200-day exponential moving average (EMA), around $3,600, which is the third test of this key dynamic resistance since November. It is important to note that prices operating within a sideways range often follow the inertia of “touching the upper boundary and falling back to the lower boundary.” Therefore, before a valid breakout and stabilization above the 200-day moving average, attention should still be paid to the $2,600–2,730 range as a potential consolidation and support zone.

GT (-2.77% | Current Price 10.51 USDT)

GT has entered an upward channel along with mainstream coins. From the 1-hour chart, after a volume-driven surge, the price has entered a high-level consolidation phase, with short-term momentum clearly slowing down. The current price is around $10.47, slightly below MA5 and MA10, and still under MA30. Additionally, after falling back from the upper Bollinger Band, the price is gradually approaching the middle band, with the bandwidth beginning to converge, indicating that the previous trend has paused and the market is entering a consolidation phase before choosing a direction. The lower Bollinger Band is at around $10.44, serving as an important short-term support. If broken, it may further test the previous low near $10.20.

Daily Gainers and Losers Tokens

After a strong 1-day rally, the crypto market has shown clear divergence in the past 24 hours: Bitcoin has risen slightly by about 0.2%, performing relatively steadily among mainstream assets, indicating that funds remain resilient in core assets. Mainstream altcoins like Ethereum, BNB, SOL generally retraced, with ETH down nearly 2%, XRP dropping over 4%, and risk appetite cooling off temporarily. Overall, short-term funds are more defensive and cautious. Despite this, some tokens still attract capital, and detailed analysis of these tokens will follow.

ICP Internet Computer (+27.85%, Circulating Market Cap $2.432 billion)

According to Gate data, ICP is currently quoted at $0.0013709, up 27.85% in 24 hours. Internet Computer (ICP) is a decentralized network launched by the DFINITY Foundation, aiming to enable developers to build and run scalable web applications and services directly on the blockchain without relying on traditional cloud platforms. Its core innovations include chain key technology and Canister smart contracts, supporting high-performance, low-cost on-chain computation and cross-chain interaction.

On January 15, the DFINITY Foundation released the white paper “Mission70,” proposing to reduce ICP’s inflation rate by about 70% by 2026, mainly through decreasing new token issuance. This proposal was widely anticipated by the market before official release. The downward inflation trend implies tighter supply in the medium to long term, especially with approximately 40% of ICP already staked, creating some constraints on circulating supply. Overall, Mission70 aims to enhance the network’s long-term sustainability and address token holders’ concerns about dilution risks. However, the plan still needs to go through governance procedures, with specific voting arrangements and implementation timelines yet to be clarified, leaving some uncertainty in execution.

DOLO Dolomite (+20.10%, Circulating Market Cap $26.92 million)

According to Gate data, DOLO is currently priced at $0.07356, up 20.10% in 24 hours. Dolomite (DOLO) is a decentralized lending and margin trading protocol supporting multi-asset collateral, leverage trading, and efficient capital utilization. Its core advantage lies in a highly modular risk control and account system, which ensures security while improving capital efficiency, serving professional DeFi users and strategic funds.

On January 12, World Liberty Financial (WLFI) launched a Dolomite-based lending platform “World Liberty Markets.” Users can now directly borrow assets such as USD1 (a stablecoin issued by WLFI with a market cap of $3.4 billion), ETH, and USDC through Dolomite infrastructure. This integration brings real-world demand into the Dolomite ecosystem. The market cap of USD1 provides immediate practical value as a settlement layer for DOLO, and WLFI’s connections with political circles also attract mainstream capital. Increased protocol usage typically boosts token value through fee mechanisms. Attention should be paid to the upcoming approval of WLFI’s application for a national trust bank license, which could accelerate USD1 adoption on Dolomite.

ARRR Pirate Chain (+39.20%, Circulating Market Cap $123 million)

According to Gate data, ARRR is currently priced at $0.6352, up over 39.20% in 24 hours. Pirate Chain, based on zk-SNARKs zero-knowledge proof technology, launched in 2018, is a privacy-focused cryptocurrency project emphasizing “default anonymity” for on-chain transactions. Pirate Chain uses PoW with the Equihash algorithm and employs a “delayed proof of work (dPoW)” mechanism, anchoring its block hashes to the Bitcoin blockchain to enhance security and resist 51% attacks.

The recent price surge of ARRR is mainly driven by increased interest in privacy coins and community exposure. On one hand, ARRR’s rise coincides with a resurgence in privacy coin attention, as regulators tighten scrutiny on transparent blockchains. Investors may see ARRR’s enforced zk-SNARK privacy as a hedge against regulatory monitoring. On the other hand, prior community-driven hype, including unverified rumors on X about Zcash developers switching to ARRR, has boosted project visibility.

Hotspot Analysis

The recent crypto market rebound triggered the largest short liquidation since October, with nearly $577 million in short positions liquidated in the past 24 hours

On January 14, according to Glassnode data, driven by the market rebound, a total of $684 million was liquidated across the entire network in the past 24 hours, with $577 million in shorts, marking the largest short liquidation among the top 500 cryptocurrencies since the “10/11 crash.”

The market may be at a critical psychological and technical juncture. Currently, cryptocurrencies led by Bitcoin are rapidly breaking through accumulated short positions, causing a “short squeeze.” In the short term, breaking above $95,000 is a key green light for the entire digital asset market to regain risk appetite. This has reignited bullish momentum, with market participants now focusing on the possibility of Bitcoin surpassing $100,000 and potentially retesting historical highs.

Key supporters face setbacks, Senate Banking Committee cancels “CLARITY Act” revision hearing

The Senate Banking Committee was scheduled to hold a clause revision hearing on Thursday morning. On January 15, the committee canceled the hearing intended for amending and voting on comprehensive crypto legislation. The “CLARITY Act” aims to clarify the regulatory authority between the Commodity Futures Trading Commission and the Securities and Exchange Commission, define when digital assets should be classified as securities or commodities, and establish new disclosure requirements. The bill text was published Monday evening, with the deadline for amendments set for Tuesday late night, paving the way for a vote on Thursday, but support began to fracture on Wednesday.

The key negotiator for the bill, Democratic Senator Ruben Gallego, stated he was supposed to meet with Patrick Witt, Executive Director of the President’s Digital Asset Advisory Committee, but he did not attend. He said he currently cannot support the bill. Subsequently, the first licensed publicly traded exchange announced its withdrawal of support. CEO Brian Armstrong posted on X expressing concerns about provisions related to stablecoin yields, tokenized equity, and decentralized finance. However, other crypto companies and advocacy groups still support the bill, stating they will continue efforts to pass it into law by 2026.

FED officials unanimously defend policy independence while signaling a pause on rate cuts

On January 15, multiple FED officials publicly emphasized that political or judicial pressure should not interfere with monetary policy decisions, and maintaining independence in policy formulation is crucial. Meanwhile, most officials signaled a possible pause in rate cuts at this month’s meeting, citing resilient US economy and elevated inflation as reasons for continued restrictive monetary policy.

It is noteworthy that within the FED, a consensus is forming. Chicago Fed President, Atlanta Fed President, and New York Fed President all stressed the importance of maintaining long-term inflation stability. Before inflation further clearly declines, keeping interest rates stable in the short term is considered a more prudent choice. Regarding economic outlook, only a few officials like Milan are optimistic about inflation returning on the right track, while most suggest that a rate cut in the January FOMC meeting is unlikely. The market generally expects that the earliest rate cuts may resume after June this year.
References:

• Gate, https://www.gate.com/trade/BTC_USDT
• Farside Investors, https://farside.co.uk/btc/
• Gate, https://www.gate.com/trade/ETH_USDT
• CoinGecko, https://www.coingecko.com/en/cryptocurrency-heatmap
• X, https://x.com/glassnode/status/2011446639043756289
• The Block, https://www.theblock.co/post/385698/senate-banking-committee-postpones-markup
• Japan Times, https://www.japantimes.co.jp/business/2026/01/15/markets/fed-independence-rate-hold/

Disclaimer Investing in cryptocurrencies involves high risks. Users are advised to conduct independent research and fully understand the nature of the assets and products before making any investment decisions. Gate is not responsible for any losses or damages resulting from such investment decisions.