10x Research: Bitcoin rally driven by Trump could lose steam before the end of January FOMC meeting.
10x Research founder Markus Thielen stated that the Federal Reserve's decisions remain the "main risk" for Bitcoin to hinder another price surge.
10x Research: Bitcoin rally driven by Trump could lose steam before the end of January FOMC meeting.
NEWS
A Bitcoin rally led by Donald Trump — scheduled to occur in the days leading up to his presidential inauguration in the United States on January 20 — is expected to lose steam towards the end of the month, coinciding with the release of the Federal Reserve's first interest rate decision of the year.
In a report on January 5, Markus Thielen, founder of 10x Research, predicted a "positive start" in early January, followed by a slight pullback ahead of the Consumer Price Index (CPI) inflation data release on January 15, before the rally gains strength again ahead of Trump's inauguration.
"A favorable outcome in the inflation report could reignite optimism, driving a rally ahead of Trump's inauguration," Thielen noted regarding a potential positive CPI outcome.
"However, this momentum could fade, with the market likely to pull back somewhat ahead of the FOMC meeting on January 29," Thielen added.
Bitcoin’s projected path for January 2025. Source: 10x Research
CME Group's FedWatch tool currently shows an 88.8% probability that the U.S. Federal Reserve's target rate will remain between 425 and 450 basis points following the FOMC meeting on January 29.
Bitcoin fell almost 15% to approximately $92,800 following the FOMC meeting on December 18, when the number of projected rate cuts for 2025 was reduced from five to two.
The Federal Reserve's announcement is the "main risk" behind a Bitcoin rally in 2025, according to Thielen, who added:
"We anticipate lower inflation this year, although it may take time for the Federal Reserve to formally recognize and respond to this change."
Another key factor will be the pace at which institutional investors return to the cryptocurrency market, reflected through the issuance of stablecoins and flows into exchange-traded funds (ETFs) of $BTC btc spot, Thielen noted.
Thielen expects Bitcoin to be in the range of $97,000 to $98,000 by the end of January.
Meanwhile, John Glover, head of investments at crypto lending firm Ledn, stated that Bitcoin could pull back to $89,000 before recovering and reaching $125,000 by the end of the first quarter.
From there, Bitcoin could pull back to $100,000 once again before attempting to reach $160,000 by late 2025 or early 2026, according to Glover in statements to Cointelegraph.
Glover's estimate of $160,000 is more conservative than the $180,000 and $200,000 predictions made by asset management firms VanEck and Bitwise.
Despite the short-term bearish outlook, the Crypto Fear & Greed Index, which measures market sentiment for Bitcoin and other cryptocurrencies, returned to the "Extreme Greed" zone with a score of 76 out of 100 on January 5, as Bitcoin rose to $98,850.
The index exited the "extreme greed" zone on December 27, 2024, remaining in the "greed" zone for 10 days.
