Analysis of Bitcoin Impact in Q1: Markus Thielen’s Perspective
With the buzz surrounding the reemergence of Donald Trump as the 47th U.S. President, the cryptocurrency market witnessed a significant uptick.
However, apprehensions arise as speculations hint at a probable downturn with the looming announcement of the Federal Reserve’s initial interest rate verdict for the year.
Forecasts for Q1?
Per insights from Markus Thielen, the mind behind 10x Research, an auspicious commencement in early January might be followed by a minor dip preceding essential economic statistics, eventually culminating in another surge leading up to Trump’s inauguration on January 20.
This narrative sets the stage for an intriguing outlook on Bitcoin [BTC] and the wider cryptocurrency sphere in the approaching weeks.
Discussing the subject, Thielen emphasized the potential positive inflational outcome and remarked,
“A promising inflation figure could rekindle optimism, driving an upsurge into the Trump inauguration.”
He further stated,
“Nevertheless, this momentum could taper off, with the market likely receding somewhat before the FOMC meeting on January 29.”
For the uninitiated, CME Group’s FedWatch tool indicates an 88.8% likelihood that the US federal target rate will hover between 425 and 450 basis points following the forthcoming FOMC assembly on January 29.
Status of Bitcoin’s Price?
This narrative unfolds after Bitcoin encountered a nearly 15% slump to around $92,800 post the December 18 FOMC meeting, during which the Federal Reserve downgraded its anticipated interest rate reductions for 2025 from five to two.
As per Thielen, the forthcoming declarations from the Federal Reserve pose a substantial jeopardy to any potential BTC upswing in 2025, introducing an element of uncertainty to the market’s bullish perspective.
“We anticipate reduced inflation this year, albeit the Federal Reserve might require some time to acknowledge and respond to this transition officially.”
Despite provisional turbulence, the broader forecast for Bitcoin appears sanguine, propelled by institutional engagement in stablecoin minting and influx in spot BTC ETFs.
Thielen envisions Bitcoin touching the $97,000 to $98,000 spectrum by January’s closure.
On a contrasting note, John Glover, the Chief Investment Officer at Ledn, predicts a probable recovery to $125,000 by Q1’s conclusion. He also hints at the likelihood of breaching $160,000 in late 2025 or early 2026.
Evaluating the Signals
Fascinatingly, the leading cryptocurrency’s Crypto Fear and Greed Index surged to “Extreme Greed,” underscoring robust trust in Bitcoin’s long-term potential, notwithstanding interim fluctuations.
Moreover, the Relative Strength Index (RSI), currently standing at 57, further reinforces Bitcoin’s enduring optimistic trajectory.
Conclusively, while Bitcoin’s rally in January displays promise, the Federal Reserve’s monetary guidelines and broader macroeconomic conditions are pivotal elements that could profoundly sculpt its future course.