Bitcoin enthusiasts are closely monitoring the cryptocurrency’s movements as analysts predict a Trump-led rally ahead of the former president’s Jan. 20 inauguration. According to Markus Thielen, founder of 10x Research, Bitcoin is set for a “positive start” to January, with optimism potentially reignited by favorable Consumer Price Index (CPI) inflation data on Jan. 15.
Optimism Hinges on Trump’s Inauguration
“A favorable inflation print could reignite optimism, fueling a rally into the Trump inauguration,” Thielen stated in a Jan. 5 report. He forecasts that Bitcoin could climb to the $97,000–$98,000 range by month’s end. However, this bullish momentum may face a slowdown as the Federal Reserve prepares its first interest rate decision of the year on Jan. 29.
The Federal Open Market Committee (FOMC) meeting poses a significant challenge to Bitcoin’s rally, as markets remain cautious about potential rate changes. CME Group’s FedWatch tool currently projects an 88.8% likelihood of the U.S. federal target rate remaining between 425 and 450 basis points.
Federal Reserve announcements generally influence Bitcoin’s price. Following the Dec. 18 FOMC meeting, Bitcoin dropped nearly 15%, retreating to around $92,800.
Institutional Investors and Sentiment Shape Bitcoin’s Path
Thielen underscores the importance of institutional investor activity as a driving force behind Bitcoin’s performance. Indicators such as stablecoin minting and spot Bitcoin ETF inflows will provide insights into institutional sentiment and potential market movements.
John Glover, Chief Investment Officer of crypto lending firm Ledn, predicts a short-term dip to $89,000 before Bitcoin surges to $125,000 by the end of Q1. Glover’s projections suggest Bitcoin could eventually reach $160,000 in late 2025 or early 2026, a more conservative estimate compared to VanEck’s bullish forecasts of $180,000.
Despite the cautious outlook for January’s end, market sentiment remains strong. The Crypto Fear & Greed Index, a popular gauge of investor sentiment, re-entered the “Extreme Greed” zone on Jan. 5, scoring 76 out of 100 as Bitcoin climbed to $98,850.
While short-term fluctuations tied to Federal Reserve policies pose risks, the broader outlook for Bitcoin in 2025 remains promising. Analysts and market participants alike are optimistic about a resurgence in institutional activity, paving the way for Bitcoin’s long-term growth.
