Bitcoin Price ‘Cuts’ in $100K–$110K Range Ahead of FOMC Meeting
As the dust settles around the “Trump pump” trade, the price of Bitcoin (BTC) has established a range between $100,000 and $110,000 since the inauguration of the new US president. The crypto asset jumped 3.78% on January 21st, but the price action has started to strengthen in the last 24 hours.
With BTC failing to show clear directional headwinds on the lower timeframe (LTF), one analyst believed that the sideways move could extend into the end of the month.
Will Quantitative Easing Fuel Bitcoin's Next Rally?
Krillin, a full-time crypto trader, hinted at the possibility of a sideways consolidation between $100,000 and $110,000 ahead of the Federal Open Market Committee (FOMC) meeting on January 28-29. And the merchant said thus.
“Assuming no BoJ manipulation, we'll cut between 100k and 110k by the end of the FOMC month.”
The analyst pointed out that there will be no interest rate cut on January 29. The CME FedWatch tool currently projects a 99.5% chance that interest rates will remain unchanged at 4.25% to 4.5%.
However, a dovish press conference or any hint of quantitative easing (QE) to address market activity could trigger the next leg for risk assets.
According to data, as of January 22, the US national debt was $36.21 trillion, which is $36.1 trillion more than the budgeted amount. With the debt ceiling now reached, the predicted solution is to raise it again. This is nothing new for Congress, since 1960 the administration has adjusted the debt ceiling 78 times.
This may lead the government to eventually engage in QE, where the US Federal Reserve may resort to large-scale asset purchases. This injects liquidity into the market, a positive boost to risk assets. One specific way to monitor liquidity inflation is to identify changes in trends in the federal balance sheet. The balance sheet fell from $9 trillion on January 15 to $6.8 trillion from April 2022 due to quantitative tightening (QT).
Federal Reserve Balance Sheet. Source: Federal Reserve
However, the path above remains subject to market speculation, and a clearer path will only be seen after January 28th and 29th.
RELATED: US Bitcoin Reserve Proposal Sparks Davos Debate on Crypto's Future
After hitting $100,000, the flow of Bitcoin capital has decreased
As the market expects Bitcoin to enter price discovery and aggressive bullish action after $100,000, data from Glassnode shows that Upon arrival, he indicated that there was a shortage of fuel.
Bitcoin Realized Cap Net Position Change Chart. Source: Glassnode
As shown in the chart, BTC's realized capitalization rate has dropped from 12.5% to 5% since November 2024. The analysis platform reported:
“Net realized profits increased by $4.5B in December 2024, and are now down to $316.7M (-93%). This reduction in sell-side pressure indicates that the market is resuming supply-demand balance.”
Bitcoin weekly analysis. Source: Bitcoindata21
The data above shows that liquidity remains thin in the Bitcoin markets. Despite these concerns, Bitcoindata21 said that the overall value of the crypto market will “double” in six to eight weeks. Based on weekly technical analysis, the analyst mentioned that “$150K for Bitcoin” is still possible:
As of March 2017 and September 2020 (see red circles), “Weekly RSI is running below the trend channel. As long as we stay in the channel, the bull market is not over.
RELATED: Revisit These Bitcoin Price Levels From ‘Door Open' To $100K
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
