How do the Federal Reserve's interest rate decisions affect Bitcoin's Trump rally?
In a report released on January 7, he explained his expectations for Bitcoin's performance in January, stating that market dynamics are closely related to inflation data and Federal Reserve (FED) policies.
Thielen predicts that with optimism supported by inflation data to be released on January 15, there will be a "positive start" this month.
Positive consumer price index data could strengthen Bitcoin's rally
As Trump's inauguration approaches, a positive consumer price index report could bolster Bitcoin's rise.
However, Thielen warns that this momentum may weaken as the January 29 Federal Open Market Committee (FOMC) meeting approaches.
Thielen states that the main "risk" for Bitcoin's rise in 2025 is the Federal Reserve's policies.
According to CME Group's FedWatch tool, there is an 88.8% chance that the Federal Reserve will keep interest rates between 425 and 450 basis points after the FOMC meeting.
After the FOMC decision on December 18, Bitcoin dropped about 15% to $92,800.
Thielen predicts that inflation may decline in 2025, but the Federal Reserve will need time to adjust its policies accordingly.
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