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Cryptopolitan 2025-01-06 10:09:30

Trump-led Bitcoin rally to surge, but Fed’s rate decision may slow momentum

Donald Trump’s upcoming inauguration could spark another Bitcoin bullish rally. However, concerns over federal rates and the Federal Open Market Committee’s (FOMC) influence might dampen investor optimism or potentially lead BTC prices to slump. The next FOMC meeting is on Jan 29, and the probability that the new federal rates will fall between 425 and 450 base points is still on the higher end at 88.8%. Meanwhile, the likelihood of rates staying within the 400–425 base point range is 11.2%. Fed rates may stay between 4.25 and 4.5 for much longer 10x Research’s founder, Markus Thielen, projected a strong start for BTC in early January. However, he still expects a slight price correction before the release of Consumer Price Index (CPI) inflation data on January 15, followed by another rally leading up to Trump’s inauguration. He believes a positive CPI result could help push Bitcoin prices up going into Trump’s inauguration. Despite his optimism, Thielen cautioned that the FOMC meeting on January 29 might temper Bitcoin’s momentum. He stated: “This momentum may wane, with the market likely retreating somewhat ahead of the FOMC meeting.” Markus Thielen With the last FOMC meeting on December 18, BTC’s prices dropped by almost 15%. At the time, the Feds only cut its key interest rate by a quarter-point, reducing the central bank’s target rate to 4.25% and 4.5%. In its statement, the Fed only projected there would be just two interest cuts in 2025, arguing that the inflation rate remains elevated. As the next Fed meeting nears, CME Group’s FedWatch predicts an 88.8% chance of federal rates being set between 425 and 450 base points, with only an 11.2% chance of rates staying at 400–425 base points. Thielen believes Feds’ communication will be critical in driving the Bitcoin rally According to Thielen, the Federal Reserve’s communication timing will be key in determining future Bitcoin prices. He believes inflation rates will decrease in 2025 and that the Fed’s timing to identify the shift and communicate that to the public will affect the Bitcoin price rally. Additionally, Thielen suggested that the Bitcoin momentum will be fueled by the speed at which institutional investors re-engage with the crypto market, evidenced by stablecoin minting and inflows into spot Bitcoin ETFs. He also projects BTC’s price to settle between $97,000 and $98,000 by the end of the month. Meanwhile, Ledn’s CIO, John Glover, expects Bitcoin’s price to drop to $89,000 before rebounding again to $125,000 by the end of the first quarter. He projects for Bitcoin to see another retracement, dropping to $100,000 before reaching $160,000 by the end of 2025 or even early 2026. Land a High-Paying Web3 Job in 90 Days: The Ultimate Roadmap

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