Market Snapshot: Major Shifts in Crypto and Financial Markets (Late December)

Wallet Security Alert: Trust Wallet Reports 2,596 Affected Addresses

Trust Wallet has confirmed a significant security incident affecting 2,596 wallet addresses on its v2.68 browser extension. The team has received approximately 5,000 compensation claims, though many contain duplicate or invalid submissions. The core focus now is accurately verifying wallet ownership through cross-validation methods to distinguish legitimate victims from malicious claimants. CEO Eowync.eth emphasized that the team prioritizes accuracy over speed, ensuring funds return to rightful owners. A comprehensive update is expected within 24 hours as forensic investigations continue in parallel with verification work.

Central Bank Digital Currency: Digital Yuan Roadmap Unveiled

Vice Governor Lu Lei of the People’s Bank of China outlined the future direction of the digital yuan, describing it as a modern digital payment instrument with commercial bank liability attributes. The currency will function as a unit of account, store of value, and cross-border payment solution. The central bank is pursuing an inclusive, prudent approach to developing both account-based and value-based digital currency models. A major milestone approaches: the “Action Plan on Further Strengthening the Management and Service System and Related Financial Infrastructure Construction of Digital RMB” will officially launch the next generation framework on January 1, 2026, featuring new operational mechanisms and ecosystem structures.

Flow Blockchain: Recovery Coordination Underway

The Flow team is coordinating with critical infrastructure partners following a significant blockchain rollback decision. Initially criticized for insufficient communication with bridging operators and exchanges, Flow has distributed remediation plans to all ecosystem partners for evaluation. The coordination process is expected to conclude within 2-3 hours, with the team reaffirming that user funds remain secure and unaffected.

DEX Trading Dominance: Solana Reaches $1.7 Trillion Milestone

Solana’s decentralized exchange (DEX) spot trading volume has surged to over $1.7 trillion year-to-date, capturing the second-largest share globally and surpassing traditional centralized competitors. This explosive growth reflects the platform’s rising prominence in permissionless trading infrastructure.

Token Unlocks on the Horizon: Potential Price Pressure

The crypto market faces significant token unlocking events next week:

• Hyperliquid (HYPE): 9.92 million tokens (~$256 million) unlocking at $24.57 current price, representing 2.87% of circulating supply
• Sui (SUI): 43.69 million tokens (~$63.4 million) on January 1st, 1.17% of supply
• EigenLayer (EIGEN): 36.82 million tokens (~$14.4 million) at $0.40 current price, 9.74% of supply
• Kamino (KMNO): 229 million tokens (~$11.8 million) at $0.06, 5.35% of supply
• Optimism (OP): 31.34 million tokens (~$8.6 million) at $0.34, 1.65% of supply
• Ethena (ENA): 40.63 million tokens (~$8.6 million) at $0.22, 0.56% of supply
• Other projects: ZORA, SVL also see substantial unlocks

These releases could create downward price pressure as newly unlocked tokens enter circulation.

Bitcoin & Ethereum: Technical Indicators Signal Potential January Turnaround

On-chain analysis reveals nuanced market positioning. Bitcoin (currently $95.41K) trades with RSI at 43% (bullish signal) while the Stochastic Oscillator sits at 30% (bearish signal). Bitcoin is 4.5% from triggering a trend reversal, with key technical levels at $88,421 (short-term) and $98,759 (major) pivot points.

Ethereum mirrors similar positioning, with RSI at 44% but Stochastic Oscillator at 23%. ETH is 5% away from potential trend change, with key levels at $2,991 and $3,363 respectively.

Realized volatility has begun contracting: Bitcoin’s 30-day realized volatility dropped to 38.2% (down 7% from 45% average), while Ethereum fell to 61.2% (down from 66.6% average).

Market Structure Concerns: Leverage-Driven Bounces Amid Capital Outflows

Crypto analyst Ali warns that recent rebounds appear driven by leverage rather than spot demand. Bitcoin ETFs have experienced nearly $1 billion in net outflows over two weeks, and overall cryptocurrency trading volume is down 30% from typical levels. This “dead cat bounce” dynamic poses elevated risks for further downside if leverage unwinds occur.

The Coinbase Bitcoin Premium Index has remained negative for two consecutive weeks at -0.0784%, indicating significant selling pressure in US markets and declining investor risk appetite.

Whale Accumulation: LINK and Other Tokens Show Institutional Interest

Multiple whales have aggressively accumulated Chainlink (LINK) through recent withdrawals. One newly created wallet withdrew 203,060 LINK ($13.66 current price, approximately $2.52 million) in a single transaction, while other whales accumulated 234,979 and 469,437 LINK tokens respectively, suggesting coordinated institutional positioning.

ETH whale “0xa339” continues leveraged long accumulation despite floating losses. The address has sold 50,623 ETH at an average price of $2,921 and is currently underwater by $6.576 million despite holding 38,415 ETH.

Risk Alert: ATLAS Memecoin Shows Signs of Insider Trading

On-chain analytics platform Bubblemaps flagged memecoin ATLAS (inspired by Vice President JD Vance’s dog) as suspicious. Analysis revealed 68 wallets with zero prior activity received funds via ChangeNow and concentrated their purchases before the project’s public launch. These wallets now control 47% of total token supply ($1 million equivalent), strongly suggesting coordinated insider accumulation.

Precious Metals Rally: Gold and Silver Hit Record Highs Amid Bitcoin Weakness

Gold and silver have broken all-time records, with silver surpassing the $80/ounce mark for the first time. However, this outperformance has come at Bitcoin’s expense—BTC is down 6.25% year-to-date after hitting record prices, while Ethereum has fallen 12%. Investment advisors increasingly suggest cryptocurrency investors consider rotating into gold and precious metals given central bank purchasing, lower volatility, and improved liquidity profiles.

Capital Economics warns precious metal prices may be approaching “cliff edge” levels, predicting silver could retreat to $42 by year-end if speculative fervor subsides. UBS highlighted concerns about thin year-end liquidity amplifying volatility risks.

Policy Developments: AI in Finance Takes Center Stage

The People’s Bank of China’s Science and Technology Department announced plans to “actively, steadily, safely, and orderly” promote artificial intelligence applications in finance. The 15th Five-Year Plan emphasizes comprehensive “AI+” action implementation as China seeks commanding heights in industrial AI applications, with enhanced governance frameworks forthcoming.

Meanwhile, El Salvador continued its sovereign Bitcoin accumulation strategy, adding 1,511 BTC since January 1, 2025. The nation maintains one of the world’s most consistent institutional Bitcoin acquisition programs.

DeFi Ecosystem Updates: Security Standards Debate Intensifies

Following the DeBot wallet theft incident, industry leaders emphasized that DEX bot products must meet exchange-level security standards. Storing user private keys on centralized servers—even in encrypted form—creates unacceptable risks equivalent to centralized exchange compromises. Correct wallet evolution requires balancing private key security with user experience without sacrificing either principle.

DeBot initiated a 72-hour compensation verification process with 100% reimbursement guarantees for confirmed victims, establishing a precedent for rapid incident response.

Market Outlook: January Inflection Point Ahead

Despite current market calm on the surface, underlying data reveals significant positioning shifts. Funding rates are gradually rising as leverage liquidation continues, while derivatives indicate distinctly different signals than spot markets. Technical indicators approach critical pivot points where minor fluctuations could trigger major asset allocation shifts.

The Federal Reserve meeting minutes and potential interest rate guidance next week remain key catalysts. US stock markets have surged to record highs, with the S&P 500 up nearly 18% annually and potentially on track for its eighth consecutive monthly gain—the longest streak since 2017-2018. However, technology sector weakness coupled with sector rotation into moderately-valued areas suggests profit-taking pressures.

Cryptocurrency markets appear poised for directional clarity in January, with Bitcoin and Ethereum technical structures suggesting latent bullish potential despite current bearish momentum. Capital inflow resumption and leverage equilibration will be critical determinants of whether cryptoassets can recapture institutional interest alongside traditional risk-on sentiment.