Bitcoin prices have repeatedly climbed above $100,000 today. (Photo illustration by Chesnot/Getty … (+)
Bitcoin prices surpassed $100,000 on Wednesday, January 15, recovering from their recent fall below $90,000, as anticipation of crucial policy decisions propelled the digital currency higher.
The world’s most valuable digital currency by market value surpassed $100,700 around 3:30 p.m. EST, according to Coinbase data from TradingView.
After hitting this local high, the cryptocurrency fell back, falling to around $99,500 in the following hours, additional Coinbase data from TradingView indicates.
However, the digital asset resumed its roller coaster ride, reaching nearly $100,900 around 7 p.m. EST. At this point, it had climbed more than 14% since falling to nearly $89,000 on Monday, January 13.
In explaining what fueled these latest gains, analysts highlighted a handful of developments that could lead to bullish policy.
For starters, several market watchers pointed to recent inflation reports, saying the results they reported could lead Federal Reserve officials to take a less hawkish approach.
The Federal Open Market Committee’s (FOMC) decision to raise the target range for the benchmark federal funds rate by more than 500 points in less than two years generated significant visibility as it exerted strong upward pressure on borrowing costs.
In addition to the aforementioned government reports and their potential impact on monetary policy, some analysts have pointed to the upcoming inauguration of President-elect Donald Trump, describing it as likely to benefit the world’s most important digital currency.
Brett Sifling, wealth manager for Gerber Kawasaki Wealth and Investment Managementspoke about the first potential cause, saying in an emailed comment: “It appears that today’s Bitcoin rally was sparked by today’s CPI report. »
It was referred to the Ministry of Labor’s announcement revealing that in December, the consumer price index for all urban consumers increase at an annualized rate of 0.4%.
“With this surprisingly strong inflation news today, my guess is that market participants are more willing to take risks in hopes that the report translates into a more lenient Fed,” he said. .
“However, this theory is at odds with the recently released strong jobs report. Investors are balancing the two reports in the hope that interest rate hikes will be suspended in 2025,” Sifling said.
Greg Magadini, director of derivatives for the digital asset data provider Amberdataalso mentioned these government reports in emailed comments.
“The main drag on US risk assets and Bitcoin has been the monetary environment since the December FOMC meeting,” he noted.
“Yesterday we had a core CPI at +.1% (versus a median forecast of +.3%) and today a core CPI at +.2% (versus a median of +.3), despite the increase in the non-essential CPI due to oil prices,” continued Magadini.
“Overall, it was really optimistic as the inflationary environment seemed less dire this week. Combining this macroeconomic outlook with Monday’s inauguration, which promised to be bullish for the crypto industry, markets returned to Bitcoin’s $100,000 level,” he said.
“This price level has attracted options buyers and remains the largest source of dealer inventory concentration on Deribit,” Magadini said, highlighting activity in derivatives markets.
Disclosure: I own Bitcoin, Bitcoin Cash, Litecoin, Ether, EOS, and SOL.
