Bitcoin is currently trading around $104,000, but according to an analysis by Japanese exchange BitBank, its price could drop back to $100,000 due to negative U.S. economic data related to inflation and employment figures.
Market Focus Shifts to Macroeconomic Factors
According to Yuya Hasegawa, a market analyst at BitBank, after Donald Trump’s inauguration, the crypto market is now focusing on upcoming U.S. economic reports.
📉 Although inflation slightly decreased in December, it remains stubbornly high.
📉 If the upcoming economic data is unfavorable, Bitcoin could face further downward pressure.
Ethereum, which typically follows Bitcoin’s movements, is currently performing better. After the SEC approved Bitwise’s BTC-ETH ETF, investor interest in Ethereum has significantly increased.
Ethereum ETF Reverses Trend and Sees Positive Inflows
📊 Ethereum ETFs have turned positive after several days of outflows.
📊 Funds are now adding $67.8 million worth of ETH to their holdings.
This positive trend in Ethereum could provide market stability, but Bitcoin remains under pressure due to macroeconomic conditions.
Negative Inflation Data Could Influence Fed's Decisions
On Friday, the U.S. Department of Commerce reported that the Personal Consumption Expenditures (PCE) Index rose by 0.3% in December, higher than expected.
📉 If inflation remains high, the Federal Reserve (Fed) is unlikely to ease interest rates.
📉 High interest rates typically reduce market liquidity, negatively impacting cryptocurrencies.
However, James Wo, founder of Digital Finance Group, believes that if inflation starts to decline, expectations of lower interest rates could trigger a bullish trend.
“Expected rate cuts will increase the money supply, which boosts purchasing power and often drives market growth,” Wo explained.
Regulatory Changes and Their Impact on Crypto Markets
Despite concerns about inflation, the long-term outlook for Bitcoin and Ethereum remains positive.
📌 Fed Chair Jerome Powell recently suggested that U.S. banks could cooperate with crypto firms.
📌 The removal of the restrictive SAB 121 rule indicates potential deregulation in the sector.
📌 This could attract new institutional investors, strengthening the market over the long run.
Trump's Policies and the Rising Interest in Reserve Assets
According to 10X Research, Trump’s trade policies could support Bitcoin, much like they recently boosted gold prices.
📊 Since his election, 393 metric tons of gold—worth $35 billion—have been moved into COMEX vaults in New York.
📊 This increased gold reserves by 75%, the highest level since 2022.
Gold is often seen as a safe-haven asset, which means that rising gold prices could also drive demand for Bitcoin as an alternative reserve asset.
Will Bitcoin Continue to Decline or Bounce Back?
⚠️ Analysts warn that BTC could drop to $100,000 in the short term.
🚀 However, the long-term outlook remains positive, especially if the Fed lowers interest rates and institutional interest in crypto continues to grow.
The answer to whether Bitcoin will keep falling or stage a strong recovery will become clearer in the coming weeks as new economic data is released. 📊🔥
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