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Bitcoin Rebounds as Rate Cut Sparks Revive... Expectations Rise Ahead of Trump's Inauguration [Minseung Kang's Trade Now]

Minseung Kang
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  • It was reported that expectations for a rate cut and Trump's inauguration are driving the rise in Bitcoin prices.
  • It was stated that if Bitcoin breaks the resistance line of $108,500, further gains are possible, but a decline is expected if it falls below $102,000.
  • The recent accumulation behavior of large whale investors is analyzed to be supporting the upward trend of Bitcoin.
STAT AI Notice
  • The article was summarized using an artificial intelligence-based language model.
  • Due to the nature of the technology, key content in the text may be excluded or different from the facts.

"Bitcoin, Bullish if it Breaks 108.5k"

"Potential for Decline if Below 102k"

Image = ShutterstockImage = Shutterstock

Bitcoin (BTC, Bitcoin), which rebounded on the back of favorable U.S. inflation indicators, is showing an upward trend, hitting an all-time high just hours before the inauguration of U.S. President-elect Donald Trump (2 a.m. KST on the 21st). Market participants are keenly watching what Trump will say during the inauguration.

Market experts have analyzed that Bitcoin could show strength if it stably breaks the major resistance of $108,500, but if it falls below the support level of $102,000, the decline could widen.

As of 7:01 p.m. on the 20th, Bitcoin is trading at 161.69 million won on the Upbit KRW market, up 4.58% from the previous day (equivalent to $108,292 on the Binance USDT market). At the same time, the Kimchi Premium (the price difference between overseas and domestic exchanges) is 3.17%.

"Thank You CPI... Global Stocks and Crypto Assets Rebound"

As U.S. inflation fears have eased recently, bond yields have plummeted, and global stock and crypto asset markets have risen. Previously, the market had been adjusted due to stronger-than-expected U.S. labor indicators, but a relief rally unfolded as both producer and consumer prices were recently contained.

On the 15th (local time), the U.S. Department of Labor announced that the core Consumer Price Index (CPI) for December rose 3.2% year-on-year and 0.2% month-on-month. Analysts say that as U.S. consumer prices met or slightly fell short of expectations, investor sentiment improved. Meanwhile, the core CPI, which excludes volatile energy and food prices, is known as the most important indicator for the U.S. Federal Reserve when considering monetary policy.

With the improvement in inflation indicators, expectations for a rate cut are reviving in the market. U.S. economic media CNBC reported on the 15th that "the core consumer price index for December slowed more than expected and recorded another bright inflation figure following the producer price index (PPI) announced the previous day." Bloomberg also reported that "as the U.S. core CPI for December finally eased, expectations have grown that the U.S. Federal Reserve will cut rates early."

Image = CME FedWatch CaptureImage = CME FedWatch Capture

However, there are still concerns in the market about Trump-induced inflation. According to the Chicago Mercantile Exchange (CME) FedWatch at 7 p.m. that day, the possibility of the Fed keeping the benchmark interest rate unchanged at 0.25% this month is 99.5%. FedWatch predicts a 28.2% chance of a cut in March and a 39% chance in May.

"Expectations Rise for Trump's Inauguration... Whale Investors Resume Accumulation"

U.S. Bitcoin Spot ETF Fund Inflow / Image = Farside InvestorsU.S. Bitcoin Spot ETF Fund Inflow / Image = Farside Investors

Bitcoin spot exchange-traded funds (ETFs) saw a net inflow of $1.86326 billion (about 2.6991 trillion won) last week (13th-17th). The recent introduction of strategic Bitcoin reserve bills in Texas and Arizona and news that the Trump administration plans to include industry CEOs on the crypto advisory committee have heightened expectations for a rise. Meanwhile, at least 10 U.S. states are reportedly planning to introduce bills for Bitcoin reserves.

Bitcoin has recently undergone adjustments, and many of the overheating factors have been resolved, according to analysis. On-chain analysis platform Glassnode stated in a research report, "After Bitcoin recently approached $108,000 and underwent adjustments, many of the market's overheating factors have been resolved," adding, "The current crypto asset market has relatively decreased in decline and volatility." The report analyzed that the reduced stress in the market recently is due to the inflow of spot buying by ETFs and institutional investors.

The report stated, "The degree of market anxiety in the recent adjustment was relatively lower compared to past declines (at peaks)," adding, "Currently, Bitcoin is significantly above the average purchase price (average price) of short-term investors, which is $88,400. This shows that the foundation of the bull market remains solid."

There are also observations that Bitcoin has shown strong resilience despite inflationary pressures amid expectations for Trump's policies. Global crypto asset exchange Bitfinex stated, "Recently, Bitcoin has maintained resilience despite macroeconomic pressures," adding, "In the short term, volatility may intensify, but optimism about President-elect Trump's pro-crypto policies is expected to limit Bitcoin's losses and position Bitcoin strongly in the long term."

Whale wallets holding 10 or more Bitcoins are accumulating again. Meanwhile, USDT and USDC supply is declining. / Image = SantimentWhale wallets holding 10 or more Bitcoins are accumulating again. Meanwhile, USDT and USDC supply is declining. / Image = Santiment

There is also analysis that whale investors are accumulating Bitcoin again. Crypto asset data analysis firm Santiment stated in a research report, "Whale wallets holding 10 or more Bitcoins have stopped inflows since December last year, but it seems they have recently resumed Bitcoin accumulation," adding, "These movements suggest that Bitcoin's recent rebound is a solid rebound." However, there are also forecasts that the market's liquidity may shrink somewhat in the future as the supply of Tether (USDT) and USD Coin (USDC) is declining.

Polymarket shows a 57% probability of Trump's strategic Bitcoin reserve. / Image = PolymarketPolymarket shows a 57% probability of Trump's strategic Bitcoin reserve. / Image = Polymarket

Meanwhile, in the prediction market, there is analysis that Trump's strategic Bitcoin reserve plan may become a reality. Reports that President-elect Trump will designate crypto assets as a policy priority immediately after taking office are spreading long-term optimism. On this day, the crypto asset-based decentralized prediction platform Kalsi predicts a 61% chance that Trump will strategically reserve Bitcoin this year. On the decentralized prediction platform Polymarket, 57% are betting that Trump will strategically reserve Bitcoin within the first 100 days of taking office.

"Bitcoin Expected to Rise Significantly if it Stably Breaks $108,500"

Market experts believe that if Bitcoin breaks the major resistance near $108,500, the rise could be even greater, but if it breaks below $102,000, the decline could deepen. Along with this, in the crypto asset derivatives market, there is analysis that Bitcoin's implied volatility (IV) is expanding ahead of Trump's inauguration. IV is an indicator that predicts future volatility.

Bitcoin is raising expectations for further gains as it breaks through short-term resistance. Ayush Jindal, a researcher at NewsBTC, stated, "Bitcoin is preparing for the next rise," adding, "If Bitcoin closes above $104,650 (on a 1-hour candle basis), further gains are possible. It could then reach $106,000 and $108,500 in sequence." The analyst added, "Bitcoin's major support levels are estimated at $102,000, $100,500, and $95,500, respectively."

Rakesh Upadhyay, a researcher at Cointelegraph, also stated, "The recent rise is due to expectations that the U.S. will adopt a strategic Bitcoin reserve plan," adding, "Bitcoin signaled the end of the adjustment by breaking the resistance of $102,724. Currently, buying pressure is dominant."

The analyst predicted, "Bitcoin is expected to rise to $108,353," adding, "This section could act as strong resistance. If it breaks through, it could rise further to $126,706." However, if Bitcoin gives up $97,533, downward pressure could increase, and it could continue to fall to $90,000.

While buying pressure for Bitcoin is rising in the market, there is also analysis that a bubble is forming. Christopher Lewis, an analyst at FXPro, stated, "If Bitcoin rises further from the current price level, it could reach $108,000," adding, "Significant resistance is expected from $108,000 to $110,000. If it breaks through $110,000, a larger rise is possible."

The analyst added, "The Trump administration may show a friendly attitude toward crypto assets but may not take any action," adding, "Currently, many traders seem to be accumulating Bitcoin in preparation for the next rise." Additionally, there is a forecast that if Bitcoin breaks through $110,000 and continues its upward trend, it could reach $130,000 this month, stimulating investors' 'Fear of Missing Out' (FOMO).

Minseung Kang, Bloomingbit reporter minriver@bloomingbit.io

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minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.