With Bitcoin approaching a potential rally fueled by Donald Trump's upcoming presidential inauguration on Jan. 20.
With Bitcoin approaching a potential rally fueled by Donald Trump's upcoming presidential inauguration on Jan. 20, experts warn that momentum may diminish as the Federal Reserve's first interest rate decision of the year looms on Jan. 29.
Markus Thielen, founder of 10x Research, identified the Fed’s decisions as a significant risk for Bitcoin's price movements.
In a recent report, Thielen suggested that Bitcoin could experience a positive start in early January, with a possible pullback leading up to the Consumer Price Index (CPI) data release on Jan. 15. He noted that a favorable inflation report could reignite market optimism, potentially driving prices higher as the inauguration date approaches.
However, Thielen cautioned that the anticipated rally might lose steam ahead of the FOMC meeting, where the CME Group’s FedWatch tool indicates an 88.8% probability that the federal target rate will remain between 425 and 450 basis points.
This follows a 15% decline in Bitcoin's value to approximately $92,800 after the Fed's Dec. 18 meeting, which revised projected interest rate cuts for 2025 from five to two.
Thielen expects Bitcoin’s price to stabilize between $97,000 and $98,000 by the end of January. Meanwhile, John Glover, chief investment officer at crypto lending firm Ledn, predicted a potential dip to $89,000 before a rebound, forecasting a rise to $125,000 by the end of the first quarter.
Glover also noted a longer-term outlook, suggesting Bitcoin could reach $160,000 by late 2025 or early 2026.
Despite these short-term uncertainties, market sentiment remains strong, as evidenced by the Crypto Fear & Greed Index, which returned to the "Extreme Greed" zone with a score of 76 out of 100 as of Jan. 5, reflecting Bitcoin's recent price increase to $98,850.
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