As January unfolds, Bitcoin enthusiasts anticipate a rally driven by a Donald Trump-led boost in the days leading up to his inauguration on January 20. However, experts predict that this momentum may stall toward the end of the month, influenced by critical economic events and the Federal Reserve’s interest rate decision.
Markus Thielen, founder of 10x Research, suggests a “positive start” for Bitcoin in early January, followed by a slight pullback ahead of the upcoming Consumer Price Index (CPI) inflation data on January 15. A favorable CPI print could reignite market optimism, fueling a renewed rally into Trump’s inauguration. However, Thielen warns that this bullish momentum might wane following the Federal Open Market Committee (FOMC) meeting on January 29.
CME Group’s FedWatch tool indicates an 88.8% chance the U.S. Federal Reserve will maintain interest rates between 425 and 450 basis points after the meeting. The market’s reaction to the Fed’s policies, particularly following a December FOMC meeting where Bitcoin saw a sharp 15% drop, could play a pivotal role in shaping Bitcoin’s short-term performance. Thielen considers the Fed’s rate decisions as the “primary risk” to the 2025 Bitcoin rally.
Looking ahead, Thielen predicts Bitcoin’s price will range between $97,000 and $98,000 by the end of January. Meanwhile, John Glover, chief investment officer at crypto lending firm Ledn, forecasts a short-term dip to around $89,000, followed by a strong rebound and potential surge to $125,000 by the end of Q1. Glover’s projection remains more conservative than the $160,000 to $200,000 estimates made by firms like VanEck and Bitwise.
Despite these cautious outlooks, Bitcoin’s recent performance has brought the Crypto Fear & Greed Index into the “Extreme Greed” zone, signaling robust market sentiment. As Bitcoin hovers around $98,850 on January 5, all eyes will be on inflation data and the Fed’s upcoming decisions, which could either fuel or temper Bitcoin’s January rally.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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