Following a rapid decline to $89,256 earlier this month, Bitcoin (BTC) swiftly bounced back, achieving a record peak of $108,786 on January 20. Nevertheless, one crypto analyst suggests that any further increase may be constrained until the upcoming Federal Open Market Committee (FOMC) meeting scheduled for later this month.
Bitcoin Expected To Hover Until FOMC Meeting
The leading cryptocurrency has been witnessing a bullish trend since November, largely driven by Donald Trump’s election victory in the US. Over the last three months, BTC has climbed from around $67,000 to $104,536 as of this update, marking an impressive rise of more than 50%.
Crypto analyst Krillin anticipates that BTC may continue to remain volatile within the $100,000 to $110,000 range until the FOMC meeting occurs. The analyst points out that unless extraordinary measures are enacted by the Bank of Japan, it is improbable that Bitcoin will break this range before the month concludes.
Currently, the CME FedWatch tool shows a 99.5% likelihood that the US Federal Reserve (Fed) will not reduce interest rates in the upcoming meeting. Krillin foresees a market downturn following the anticipated hawkish stance from the meeting, which could be somewhat mitigated by a dovish press conference suggesting potential future quantitative easing (QE).
For those unfamiliar, QE is a monetary strategy where central banks inject funds into the economy by acquiring government bonds and other financial assets to lower interest rates and promote economic growth. This infusion of money can devalue fiat currencies, causing investors to shift toward assets like BTC, which serves as a safeguard against inflation and currency depreciation.
Krillin’s forecast is consistent with a recent market analysis indicating that profit-taking in BTC has plummeted by 93% from its peak in December, while long-term holders have resumed accumulation, gearing up for the next upward movement. However, the duration of this current consolidation phase remains uncertain.
Additionally, crypto analyst Ali Martinez highlights a significant drop in capital inflows into the digital assets sector, plummeting from $134 billion on December 10 to just $43.37 billion. This drastic liquidity reduction may lead to sharp price fluctuations, raising the risk of liquidations for leveraged traders.
Is BTC Expected To Peak In Q2 2025?
As Bitcoin awaits the FOMC meeting to gauge its next price trajectory, numerous analysts maintain a rationale that the cryptocurrency could establish its market cycle peak in Q2 2025, especially as more institutional investors enter the space under favorable regulatory conditions.
For instance, crypto analyst Dave The Wave recently forecasted that BTC might reach its apex in the summer of 2025. A recent report from Bitfinex corroborates this view, predicting that Bitcoin could soar to $200,000 by mid-2025, albeit experiencing minor pullbacks along the way.
It is crucial for Bitcoin to hold the $100,000 mark, as losing this level could result in a drop to as low as $97,500. As of now, BTC is trading at $104,536, reflecting a 1.4% increase in the last 24 hours.
