Bitcoin (BTC) is gearing up for a potential price breakout by the end of January, driven by market expectations surrounding the United States Federal Open Market Committee (FOMC) meeting on January 29, according to Markus Thielen, head of research at 10x Research.
Currently priced at $96,794, Bitcoin is forming a “narrowing triangle” on the charts, signaling that a breakout is imminent. Thielen explains that this technical pattern could lead to significant price movement in either direction. “From a trading perspective, the best approach is to follow the breakout, regardless of direction,” he said in his January 14 market report.
Thielen highlights rising expectations for a higher Consumer Price Index (CPI) number, but notes that if inflation comes in cooler than expected, it could spark a rally in Bitcoin. This would coincide with the first interest rate decision of 2025, closely watched by crypto investors. In December, Federal Reserve Chair Jerome Powell’s hawkish tone indicated that fewer interest rate cuts might be expected in 2025, which has been seen as bearish for risk assets like Bitcoin.
Adding to the uncertainty, Bitfinex analysts observed that the Fed’s stance in December was one of the most hawkish in recent months. They also cited the CME FedWatch Tool, which shows a 38.3% probability that the Fed may not cut rates in the first half of 2025, further weighing on Bitcoin’s outlook.
On the other hand, Thielen remains cautious about Bitcoin’s price movement as Donald Trump’s inauguration on January 20 approaches. Historical patterns from previous presidential transitions, such as the dip toward $30,000 before Biden’s inauguration in 2021, have prompted analysts to anticipate potential consolidation in the coming months. Crypto analyst Lark Davis noted that while history may not repeat itself, Bitcoin’s behavior often “rhymes” with past trends, which could influence price action following the inauguration.
Bitcoin is repeating similar price action as the last presidential election and inauguration.
— Lark Davis (@TheCryptoLark) January 14, 2025
While history may not repeat itself, it often rhymes. pic.twitter.com/lmNyoKB3uH
In conclusion, Bitcoin’s trajectory in the coming weeks will hinge on key macroeconomic events and political milestones, leaving traders on alert for a potential breakout or consolidation.
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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