The crypto market kicked off 2025 on an optimistic note, mostly fueled by new expectations stemming from the current US administration that debuted on January 20.
However, after the bullish moves in the market slowed down, it’s worth analyzing the general trends and developments from last month, to better create a view of what we can expect in February and beyond.
The Rise and Fall of the Crypto Market in January
The overall crypto market reached a peak on January 7, hitting $3.76 trillion in market cap, following a rebound from the December slump caused by the Federal Reserve’s hints of slowing down the interest rate cuts this year.
The crypto market’s recovery was mostly triggered by US President Donald Trump’s executive orders including:
- Creating a work group to explore the potential for establishing a Strategic Bitcoin Reserve in the country
- Establishing a clearer and more correct regulatory framework for digital assets
- Banning a US CBDC
President Trump’s son, Eric Trump, also showed increased support for the industry, confirming the elimination of capital gains taxes on US-issued digital assets.
However, the overall crypto market recovery was halted in January following the emergence of DeepSeek‘s low-cost AI model created by a Chinese AI company.
The AI model raised concerns about US tech overvaluations, triggering a sharp market sell-off across both traditional and crypto markets.
Bitcoin’s price dropped below the important psychological level of $100,000, as traders reacted to the developments in the AI sector.
A recent Binance Research, quoted by Crypto Street reveals an in-depth analysis of January’s market trends, key narratives, and sector-specific developments that could influence the markets in February.
Overall Crypto Market Performance in January 2025
Crypto Street highlighted that the overall crypto market recorded a 4.3% growth last month, marking a significant recovery from December’s decline.
Despite the market volatility, Bitcoin and some altcoins recorded positive monthly gains, while other digital assets saw declines triggered by shifting investor sentiment and liquidity movements. It’s worth noting that on January 20, Bitcoin reached its ATH above $108,000.
Price Trajectory of Major Digital Assets
January’s market trajectory was mostly triggered by the following factors:
- New regulatory developments under the Trump administration
- Memecoin speculation
- DeFi activity
Crypto. Street analyzes top market performers and projects that recorded price declines, citing data from Binance Research.
Top Market Performers
- XRP (+47.8%) – XRP’s DEX growth surpassed $400 million in monthly swap volume, increasing network activity, while short-term investors took profits and LTHs accumulated.
- SOL (+24.7%) – Solana network recorded a surge in DEX trading volume, mostly fueled by the launch of TRUMP and MELANIA memecoins; also, low fees and high throughput triggered high liquidity.
- BTC (+11.7%) – Crypto-friendly policies in the US triggered a price rally for the coin, together with increased global adoption, especially in Europe, with the potential inclusion in the Czech National Bank’s reserves.
- LINK (+9.6%) – LINK recorded increased adoption of its Scale and Build Programs, with more than 4,000 devs building on multiple chains using Chainlink’s oracle services.
Moderate Gainers
ADA (+7.2%) and DOGE (+2.2) recorded steady growth as the broader market sentiment remained bullish.
Market Decliners
- BNB (-3.57%) and TRX (-6.26%) – The assets recorded liquidity outflows as investors shifted interest.
- ETH (-8.2%) – ETH underperformed as Solana’s rising DeFi and DEX activity shifted liquidity from Ethereum.
- AVAX (-9.3%) – AVAX faced short-selling pressure, outpacing long positions.
Trends and Developments Worth Watching in February 2025
Crypto Street continues its analysis pointing out macroeconomic and regulatory factors, DeFi sector outlook, and NFT market projections for the month.
1. Macroeconomic and Regulatory Factors
Here are the key factors expected to shape the crypto market this month:
- US Trade and Tariff Policies – US tariff adjustments can impact global risk assets including crypto, and if stricter trade is introduced, investors could adopt a more cautious approach.
- Fed’s Interest Rate Cuts Expectations – The Fed’s stance on potential upcoming rate cuts remains an important factor in determining the market’s trajectory.
- Stablecoin Regulation and Tax Proposals – US lawmakers discuss stablecoins regulations, issuer compliance, and reserves, while zero capital gains for crypto companies could influence long-term investor behavior as well.
2. DeFi Sector Overview
While the DeFi sector TVL recorded a 0.4% growth in January, regulatory pressures are still a concern, especially in the US.
Solana’s TVL reportedly grew by 35%, reaching a record $12.1 billion on January 20, mostly driven by memecoin speculation, according to data from Binance Research.
Since then, Solana’s TVL dropped to around $9 billion today, according to data from DeFi Llama.
Binance Research also shows that Solana’s TVL share of top blockchains was 9.4% in January 2025.
According to the same notes, Ethereum was the leader with over 53% of the TVL share. Solana takes the second spot, followed by Tron with 5.5%.
3. NFT Market Projections
Data revealed by Crypto Street reveals that the NFT sector faced an important downtrend last month, with trading volume declining across all major chains, except for Base, which saw an almost 345% surge in sales.
Ethereum NFT sales recorded a decline of over 39%, while Bitcoin NFTs declined by over 39%. The BNB Chain also experienced a significant NFT trading volume decline at over 84%.
The monthly trading volume in NFTs reached over $650 million in January according to CryptoSlam data.
Key Market Narratives for This Month
Crypto Street also highlights some key market narratives worth watching in February.
1. Crypto ETFs
Following the change in administration in the US and the departure of the former SEC Chair, Gary Gensler, regulatory sentiment towards crypto ETFs in the country has shifted.
According to the publication, there are currently 47 active crypto ETF filings in the country, across various digital assets including spot, futures, and leveraged filings.
The growth in crypto ETF proposals translates into increased interest from investors for regulated crypto products.
The crypto ETF proposals include memecoins like MELANIA, DOGE, and BONK.
2. Token Creation Surge and Market Fragmentation
The crypto market recorded an unprecedented surge in new token launches, mostly triggered by the following factors:
- The rise of token launchpads
- Mememcoin speculation
According to them, as of January 2025, over 37 million new tokens were created, with predictions estimating over 100 million by the end of the year.
Most of the new tokens have been launched on Solana and BNB Chain.
Such rapid growth highlights concerns about market fragmentation, Crypto Street revealed. This means that if capital is increasingly spread across so many tokens, maintaining sustained price appreciation for any single asset becomes more difficult.
A lot of newly-launched tokens record only a short-lived price spike, before investors lose interest, leading to higher market volatility and lower retention over the long-term.
This is a trend that is expected to continue this month, but, projects with strong fundamentals and clear utility will stand out and keep investor interest in the long run.
3. Solana’s DeFi and DEX Market Leadership
Crypto Street notes that Solana’s DEX trading volume outpaced Ethereum’s for the past four months, highlighting a shift in DeFi activity.
In January, Solana’s DEX volume was over 200% higher compared to Ethereum’s, and the Solana-to-Ethereum DEX volume ratio reached an ATH of over 300%. last month, Solana DEX volume was $258 billion compared to $86 billion for Ethereum.
As mentioned above, one of the key factors for the rising activity has been the frenzy around the TRUMP and MELANIA memecoins launched in January. These coins generated billions in trading volume, pushing activity on Solana to record levels.
Beyond memecoins, Solana’s DeFi ecosystem continues to expand and platforms like Jupiter, Raydium, Meteora, and Pump.fun are attracting strong user engagement.
The question is whether in February Solana will maintain its top position in terms of DEX volume.
4. AI and DeFAI Market Sentiment
AI remains one of the hottest topics in the crypto industry. Last month, the DeFAI sector initially outperformed other narratives, with a 90% return by mid-month.
But, by the end of last month, DeFAI (DeFi and AI) tokens corrected, closing January down by 10% from the beginning of the month.
However, despite volatility, AI remains the dominant crypto narrative, capturing 44% of the market discussions, compared to memecoins at 10% and DeFi at 9.7%.
Regarding the AI tokens interest in February, it could rise due to the continued development of:
- AI-powered DeFi apps
- On-chain AI agents
- Predictive trading models
Upcoming Events and Token Unlocks in February
Apart from all the factors revealed by Crypto Street, Binance Research also addressed two other significant elements worth paying attention to in February: upcoming events and significant token unlocks.
Here are some of the most important upcoming crypto events:
- Arabian Blockchain and Crypto Expo Dubai (February 12-13)
- Consensus Hong Kong 2025 (February 18-20)
- Applied AI and Crypto Builders Denver (February 28)
- Bitcoin Investors and Founders Mixer (February 28)
- ETHDenver 2025 (February 23-March 2)
Binance also mentioned the largest token unlocks worth watching this month that could affect the market’s trajectory.
So far, SUI had the largest token unlock on February 1, at 331 million, representing 2.6% of the total supply. Other significant token unlocks will be from SAND on February 14, (110 million), APT today, February 12 (89 million), and MELANIA on February 20 (74 million).
