Bitcoin prices surpassed $100,000 on Wednesday, January 15, recovering from its recent drop below $90,000, as anticipation of political decisions propelled the virtual currency higher.
The world’s most valuable virtual currency across the market surpassed $100,700 around 3:30 p. m. GMT. EST, according to Coinbase data from TradingView.
After reaching this high, the cryptocurrency fell again, falling to around $99,500 in the following hours, further Coinbase information from TradingView indicates.
However, the virtual asset resumed its rollercoaster ride, rising to around $100,900 around 7 p. m. EST. At that time, it was up more than 14% since falling to around $89,000 on Monday, January 13.
Explaining what drove those new gains, analysts highlighted a handful of developments that may lead to bullish policy.
For starters, several market observers emphasized the recent inflation reports, stating that the results they conveyed could cause Federal Reserve officials to take a less hawkish approach.
The Federal Open Market Committee (FOMC)’s decision to hike the target range for the benchmark federal funds rate by over 500 points in less than two years generated significant visibility as it placed strong, upward pressure on borrowing costs.
In addition to the aforementioned government reports and their possible effects on financial policy, some analysts have pointed to the upcoming inauguration of President-elect Donald Trump, describing it as the most likely to gain advantage from the world’s largest virtual currency.
Brett Sifling, wealth manager for Gerber Kawasaki Wealth & Investment Management, spoke to the first potential cause, stating via emailed commentary that “It seems that the Bitcoin rally today was sparked by the CPI report today.”
He referred to the Labor Department’s announcement that revealed that in December, the customer value index for all urban customers increased at an annualized rate of 0. 4%.
“With this surprisingly solid inflation information today, I’d assume that market participants are more willing to take on risk in hopes that the report translates to a more lenient fed,” he specified.
“However, this theory contradicts the recently released employment report. “Investors are weighing the two reports in hopes that interest rate hikes will be suspended in 2025,” Sifling said.
Greg Magadini, director of derivatives for digital asset data provider Amberdata, also mentioned these government reports in emailed commentary.
“The big drag on the US risk-assets and Bitcoin, has been the monetary environment since December’s FOMC meeting,” he noted.
“Yesterday we had a core CPI of 0. 1% (against a median forecast of 0. 3%) and today a core CPI of 0. 2% (compared to a median of 0. 3), despite the increase in the CPI not underlying due to oil prices,” Magadini continued.
“Overall, it was bullish as the inflation environment looked less severe this week. Combining this macro outlook with Monday’s opening, which promised to be bullish for the crypto industry, markets have returned to Bitcoin’s $100,000 level. ” , said.
“This stock has attracted asset investors and remains the largest source of concentration of broker shares in Deribit,” Magadini said, highlighting activity in derivatives markets.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.
One Community. Many Voices. Create a free account to share your thoughts.
Our network aims to connect others through open and thoughtful conversations. We need our readers to share their perspectives and exchange ideas and facts in one space.
To do this, please comply with the posting regulations in our site’s terms of use. Below we summarize some of those key regulations. In short, civilized.
Your message will be rejected if we notice that it appears to contain:
User accounts will be blocked if we notice or believe that users are engaged in:
So, how can you be a power user?
Thank you for reading our Community Guidelines. Read the full list of publishing regulations discovered in our site’s terms of use.