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A recent report from digital asset research firm 10x Research says the US Federal Reserve’s (Fed) stance on interest rate cuts remains the most important hurdle that could dampen the current Bitcoin (BTC) rally. is emphasized.
President Trump-led Bitcoin rally is at risk ahead of FOMC meeting
Since pro-crypto Republican candidate Donald Trump secured victory in November’s presidential election, Bitcoin has rallied a staggering 47%, from around $67,500 on November 4th to January. As of the 6th, it had risen to about $99,700.
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10x Research’s Marcus Thielen expects further gains during the so-called “Trump rally” leading up to the presidential inauguration on January 20, but momentum is expected to decline ahead of the Federal Open Market Committee (FOMC) meeting in late January. He points out that there is a possibility of stalling.
Thielen expects Bitcoin prices to get off to a “strong start” in January, with a slight decline leading up to the release of Consumer Price Index (CPI) inflation data on January 15th. A positive CPI report could reignite optimism and prompt another rally before Trump takes office. However, Thielen warned that the bullish momentum could weaken ahead of the FOMC meeting on January 29th.
Source: 10x Research
Interest rates are likely to remain unchanged after the next FOMC meeting, according to the latest data from CME Group’s FedWatch tool. The tool currently predicts a 90.9% chance that interest rates will remain at 425 basis points (BPS) and 450 basis points (BPS).
Source: CME FedWatch
Bitcoin’s roughly 15% drop to $92,900 after the December 18th FOMC meeting highlights the Fed’s enormous influence. The decline comes after the Fed signaled only two interest rate cuts in 2025 instead of five, and Thielen sees the Fed’s decision as a “major risk” to BTC’s current bullish trajectory. has been strengthened. Thielen said:
Inflation is expected to decline this year, but it may take some time for the Fed to formally recognize and respond to this change.
Thielen also cited institutional investor participation as an important factor influencing short-term price fluctuations in Bitcoin, with indicators such as stablecoin mintage rates and crypto exchange-traded fund (ETF) inflows It said it would serve as an indicator of institutional investor interest.
Institutional interest in Bitcoin continues to grow
The US Spot Bitcoin ETF faced significant outflows at the end of December, but new inflows are fueling optimism about growing institutional investor interest in the premium cryptocurrency. The Spot Bitcoin ETF saw $908 million in inflows on January 3, according to SoSoValue data.
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Additionally, several large BTC mining companies such as MARA and Hut 8 are strengthening their BTC reserves. Technology companies such as Canada-based video sharing platform Rumble also recently announced a $20 million BTC treasury strategy.
Another report by crypto exchange Bitfinex predicts that Bitcoin could soar to $200,000 by mid-2025 despite a slight price decline. At the time of writing, BTC is trading at $101,555, up 3.7% in the past 24 hours.
BTC is trading at $101,555 on the daily chart | Source: BTCUSDT on TradingView.com
Featured image from Unsplash, charts from 10x Research, CME FedWatch, Tradingview.com
