Gate Research Institute: Crypto Market Rises Nearly $700 Million, Short Sellers Liquidated | Vitalik Buterin Points Out Flaws in Decentralized Stablecoins

Summary

• Bitcoin price has returned to the $96,000 level and is steadily moving along the upward channel. Ethereum broke through the key resistance level of $3,300 and continues to oscillate at high levels.
• Recently, the Zcash Foundation announced that the SEC has ended its years-long investigation without taking enforcement action; on Thursday, a key supporter experienced a setback as the Senate Banking Committee canceled the revision hearing for the CLARITY Act.
• Bitcoin and Ethereum both broke through, with nearly $700 million in short positions liquidated; Vitalik Buterin pointed out the flaws of decentralized stablecoins, and the Zcash controversy and quantum threats have attracted attention.
• In the past week, a total of 18 crypto and related projects announced completed financing or mergers and acquisitions, covering RWA, staking services, CeFi, infrastructure, and other sectors.
• ONDO, TRUMP, and ZRO will unlock approximately $778 million, $278 million, and $42.42 million worth of tokens respectively over the next 7 days.

Market Analysis

Market Commentary

• BTC Market — Bitcoin price has returned to the $96,000 level and is steadily moving along the upward channel. The current rebound shows strong momentum both in terms of magnitude and structure: the price started from a bottom area of $90,000–$92,000, with a single-day rebound of about 4.6%, reaching the highest level since late November. From a market structure perspective, spot buying is the main driver of this rally, followed by passive short covering in futures, further amplifying the upward trend. Meanwhile, a total net inflow of nearly 90,000 BTC in ten spot ETF funds and net inflows in other mainstream coin ETFs indicate institutional or high-net-worth participants quietly positioning at low levels. On-chain data shows increasing divergence among participants: average spot order sizes around $90,000 have significantly enlarged, suggesting institutional or high-net-worth funds are quietly accumulating; short-term holders have turned net sellers, with the 30-day short-term position net change falling into negative territory. Bitcoin is currently at a critical decision point; its subsequent trend will determine whether it breaks through $100,000 or continues to oscillate at high levels.
• ETH Market — After two consecutive days of strong upward movement, Ethereum broke through the key resistance of $3,300 formed in early January, briefly reaching $3,400 during the session, and is now oscillating at high levels near $3,300. The rally was driven more by clear “hard catalysts” rather than emotional factors: on one hand, progress in related legislation boosted policy expectations; on the other hand, declining inflation and macroeconomic benefits improved market risk appetite, boosting 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 should be noted that prices operating within a range tend to follow the inertia of “touching the upper boundary and falling back to the lower boundary.” Therefore, before a confirmed breakout and stabilization above the 200-day moving average, attention should remain on the $2,600–$2,730 zone as a potential consolidation and support area.
• Altcoins — Most altcoins surged collectively this week, returning the market to the “greed” zone, with the crypto fear and greed index soaring to 61, up from an average of 28 last week, reflecting a rapid recovery of market confidence.
• Stablecoins — The total market cap of stablecoins is currently $309.628 billion, an increase of $1.725 billion (0.56%) over the past week.
• Gas Fees — Ethereum network gas fees have generally remained below 1 Gwei over the past week, with the highest hourly peak at 0.147 Gwei. As of January 15, the average gas fee for the day was 0.147 Gwei.

Hot Tokens

After a strong one-day rally, the crypto market showed clear differentiation in the past 24 hours: Bitcoin rose slightly by about 0.2%, performing relatively steadily among mainstream assets, indicating resilience in “core assets” allocation. Mainstream altcoins like Ethereum, BNB, and SOL generally retraced, with ETH falling nearly 2% and XRP dropping over 4%, indicating a temporary cooling of risk appetite. Overall, funds are more defensive and cautious in the short term, but some tokens still attract capital. The following will analyze these tokens one by one.

ICP Internet Computer (+27.85%, circulating market cap $2.432 billion)

According to Gate data, ICP is currently priced 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 interactions.

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. The proposal was widely anticipated before official release. Lower inflation 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.

DOLO Dolomite (+20.10%, circulating market cap $26.916 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, ensuring 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 borrow USD1 (a stablecoin issued by WLFI with a market cap of $3.4 billion), ETH, USDC, and other assets directly 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 attract mainstream capital. Increased protocol usage typically drives up 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 was mainly driven by game content updates and increased exposure. On one hand, the rise of ARRR coincides with renewed attention to privacy coins, as regulators tighten scrutiny on transparent blockchains, and investors may view ARRR’s enforced zk-SNARK privacy as a hedge against regulatory monitoring. On the other hand, prior community-driven hype and unverified rumors on X about Zcash developers switching to ARRR have also boosted project visibility.

Key Data

Zcash Foundation: SEC ends years-long investigation without enforcement action

On January 15, the Zcash Foundation announced that the SEC has officially concluded its ongoing investigation into the organization and clarified that no enforcement action or corrective measures are planned. The foundation disclosed that it received a SEC subpoena in August 2023, related to “certain crypto asset offerings.” The SEC has now completed review and closed the case.

This closure occurs amid a shift in the SEC’s stance on crypto regulation. During the Trump administration, the SEC withdrew or terminated enforcement actions or investigations against several crypto firms over nearly a year, including a listed exchange and multiple DeFi projects, contrasting sharply with the more aggressive “enforcement-style regulation” under the Biden administration. Current SEC Chair Paul Atkins is pushing for updates to crypto regulation rules through “Project Crypto,” focusing on on-chain activities and technological realities.

Key supporter setback, 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 SEC, 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 revision submission deadline set for late Tuesday, 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, said he was supposed to meet with Patrick Witt, the executive director of the President’s Digital Asset Advisory Committee, but he did not attend. He stated he cannot support the bill at this time. Subsequently, the first licensed public exchange announced withdrawal of support, with CEO Brian Armstrong expressing concerns on X about provisions related to stablecoin yields, tokenized equity, and DeFi. However, other crypto companies and advocacy groups still support the bill, aiming to push it into law by 2026.

Fed officials jointly defend policy independence, signal possible 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 policymaking is crucial. Meanwhile, most officials signaled a possible pause on rate cuts at this month’s meeting, citing resilient US economy and high inflation as reasons to keep monetary policy restrictive.

Notably, within the Fed, there is a consensus 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 safer choice. Regarding economic outlook, only a few officials like Mester believe inflation is on the right track to fall, while most suggest that a rate cut in the January FOMC meeting is unlikely. Markets generally expect the earliest rate hikes to resume after June this year.

Focus for Next Week

Token Unlocks

According to Tokenomist data, over the next 7 days (2026.1.16 - 2026.1.22), several major tokens will undergo large unlocks. The top three are as follows:

• ONDO will unlock tokens worth approximately $778 million, accounting for 61.4% of the total unlock amount.
• TRUMP will unlock tokens worth approximately $278 million, accounting for 25.0%.
• ZRO will unlock tokens worth approximately $42.42 million, accounting for 12.6%.

**References** - Gate, [https://www.gate.com/trade/BTC_USDT](https://www.gate.com/trade/BTC_USDT) - Farside Investors, [https://farside.co.uk/btc/]###https://farside.co.uk/btc/### - Gate, [https://www.gate.com/trade/ETH_USDT]###https://www.gate.com/trade/ETH_USDT### - Gate, [https://www.gate.com/crypto-market-data]###https://www.gate.com/crypto-market-data### - DeFiLlama, [https://defillama.com/stablecoins](https://defillama.com/stablecoins) - Etherscan, [https://etherscan.io/gastracker](https://etherscan.io/gastracker) - Coingecoko, [https://www.coingecko.com/en/cryptocurrency-heatmap](https://www.coingecko.com/en/cryptocurrency-heatmap) - Rootdata, [https://www.rootdata.com/Fundraising](https://www.rootdata.com/Fundraising) - Tokenomist, [https://tokenomist.ai/](https://tokenomist.ai/) - FT, [https://www.ft.com/content/86872584-c844-4d71-af16-60157c1585ec](https://www.ft.com/content/86872584-c844-4d71-af16-60157c1585ec) - X, [https://x.com/glassnode/status/1998046938357530820](https://x.com/glassnode/status/1998046938357530820) - The Block, [https://www.theblock.co/post/385698/senate-banking-committee-postpones-markup](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/](https://www.japantimes.co.jp/business/2026/01/15/markets/fed-independence-rate-hold/) - The Block, [https://www.theblock.co/post/385629/zcash-foundation-says-sec-has-closed-book-on-years-long-probe](https://www.theblock.co/post/385629/zcash-foundation-says-sec-has-closed-book-on-years-long-probe)
[Gate Research Institute](https://www.gate.com/learn/category/research) is a comprehensive blockchain and cryptocurrency research platform providing in-depth content including technical analysis, hot topics, market reviews, industry research, trend forecasts, and macroeconomic policy analysis.

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. ()https://www.gate.com/( is not responsible for any losses or damages resulting from such investment decisions.