Key Points
- Bitcoin’s price has recovered strongly, potentially signaling a major breakout before the FOMC meeting on January 29.
- The Consumer Price Index (CPI) data release could be a significant catalyst for a Bitcoin price rally.
Bitcoin’s price has seen a strong recovery in the last 24 hours, with a 2.45% increase, moving past $97,300 levels. Markus Thielen, head of research at 10x Research, suggests that the price action of Bitcoin (BTC) is setting up for a significant breakout before the Federal Open Market Committee (FOMC) meeting scheduled for January 29.
Thielen’s market report from January 14 indicates that Bitcoin is trading within a narrowing triangle, signaling an imminent breakout, which is likely to occur no later than the January 29 FOMC meeting.
Market Influences and Expectations
According to Thielen, traders should follow the breakout, regardless of its direction. A significant catalyst for a Bitcoin price rally could be the release of the Consumer Price Index (CPI) data. If inflation is lower than expected, it could trigger a Bitcoin price rally.
The US Federal Reserve will make the first interest rate decision for 2025 at the January FOMC. Investors will be closely watching for any additional commentary, considering the hawkish tone of Fed’s Jerome Powell last month. The strong jobs data and robust US economy have already delayed the first Fed rate cuts for 2025, to June this year.
Data from the CME FedWatch Tool, highlighted by Bitfinex, indicates that traders in the Fed Funds futures market see a 38.3% likelihood that the Federal Reserve will refrain from making any rate cuts during the first half of 2025.
Bitcoin Price and Political Events
With Donald Trump’s inauguration scheduled for January 20, crypto market analysts are maintaining a cautious stance as Bitcoin price faces rejections at $100K levels. In his research report, Thielen stated that Bitcoin might consolidate for some more time, possibly for the next two months.
Crypto analyst Lark Davis noted that “Bitcoin is displaying price movements similar to those seen during the last presidential election and inauguration”. Davis shared a price chart showing that ahead of President Biden’s 2021 inauguration, Bitcoin dipped to around $30,000 before rallying to $55,000 shortly after the event. He added, “History may not repeat itself, but it often rhymes”.
