The upcoming US presidential inauguration on January 20 could spark a significant rally in Bitcoin prices, according to a recent report by 10x Research. The founder of the research firm, Markus Thielen, predicts that the cryptocurrency market will experience a "positive start" in early January, followed by a slight pullback ahead of the Consumer Price Index (CPI) inflation data on January 15.
A Favorable Inflation Print Could Reignite Optimism
Thielen notes that a potentially positive CPI result could reignite optimism and fuel a rally into Trump’s inauguration. However, this momentum may wane as the market retreats somewhat ahead of the Federal Open Market Committee (FOMC) meeting on January 29.
The FOMC Meeting: A Potential Risk to Bitcoin’s Rally
The FOMC meeting is a critical event for Bitcoin’s price action in January. The CME Group’s FedWatch tool currently shows an 88.8% chance that the US federal target rate will remain between 425 and 450 basis points following the FOMC’s Jan. 29 meeting. This could potentially lead to a pullback in Bitcoin prices, as seen in December when the FOMC trimmed the number of projected interest rate cuts from five to two.
The Federal Reserve’s Announcement: A Key Factor Behind Bitcoin’s Rally
According to Thielen, the Federal Reserve’s announcement is the "primary risk" behind a Bitcoin rally in 2025. He notes that while he anticipates lower inflation this year, it may take some time for the Federal Reserve to recognize and respond to this shift formally.
Institutional Investors: A Key Factor in Bitcoin’s Price Action
Another key factor will be the pace at which institutional investors return to the crypto market. Thielen notes that this can be reflected through stablecoin minting and spot Bitcoin exchange-traded fund (ETF) inflows.
Bitcoin’s Projected Path for January 2025
Thielen expects Bitcoin to be in the $97,000 to $98,000 range by January’s end. This is a relatively conservative estimate compared to other predictions from asset management firms such as VanEck and Bitwise, who have predicted prices of $180,000 and $200,000, respectively.
A Bearish Short-Term Outlook
Despite the bullish long-term outlooks, some analysts are predicting a bearish short-term outcome. Crypto lending firm Ledn’s chief investment officer, John Glover, said that Bitcoin may pull back to $89,000 before rebounding and hitting $125,000 by the end of the first quarter.
A Retrace Before an Attack on Higher Prices
Glover also notes that once Bitcoin hits $125,000, it could retrace to $100,000 before making an attack toward $160,000 in late 2025 or early 2026. This prediction is more conservative than the estimates of VanEck and Bitwise.
The Crypto Fear & Greed Index: A Reflection of Market Sentiment
Despite the bearish short-term outlooks, the Crypto Fear & Greed Index has returned to the "Extreme Greed" zone with a score of 76 out of 100 on January 5 as Bitcoin increased to $98,850. This is a reflection of market sentiment and could potentially lead to further price increases.
The Future of Cryptocurrency Laws Across the World in 2025
In related news, cryptocurrency laws are changing across the world in 2025. With new regulations being implemented, it’s essential for investors to stay informed about the latest developments.
