Bitcoin Approaches $100K as Market Sentiment Strengthens on CPI, Macro Data

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MARKETS TREND

Driven by positive U.S. inflation data and mounting institutional interest, Bitcoin (BTC) is displaying great increasing momentum as it approaches the key $100,000 milestone.

Bitcoin Approaches $100K as Market Sentiment Strengthens on CPI, Macro Data
Bitcoin price analysis

After the Consumer Price Index (CPI) data for December was released and matched market predictions, the top cryptocurrency hit weekly highs of $99,655.

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Macroeconomic Factors Support Bitcoin’s Ascent

While core CPI reported at 3.5%, below expected 3.8%, the December CPI print came in at 2.9%, in line with market forecasts. With CME FedView showing about 30% likelihood of a March rate drop, this data has strengthened market confidence in possible Federal Reserve rate cuts.

With Bitcoin trading patterns more like those of conventional store-of- value assets like gold, the positive inflation data has set off a more general surge across risk instruments. This association implies that near term Bitcoin prices could remain supported by declining inflation.

Favorable Institutional and Political Landscape

As President-elect Donald Trump gets ready to take office on January 20, the market for cryptocurrencies is intently observing the forthcoming presidential change. Market mood has been further raised by Trump’s earlier declared plans to enact pro-crypto rules and make the United States “the world’s crypto capital”.

Concurrent with this expansion in institutional acceptance are numerous U.S. states proposing Bitcoin strategic reserve measures. With Representative Cody Maynard introducing the Strategic Bitcoin Reserve Act on January 15, Oklahoma is the last state to suggest such legislation. Like projects in Pennsylvania, Texas, North Dakota, and New Hampshire, these demonstrate rising public acceptance of Bitcoin as a valid asset class.

BTC/USD Technical Analysis

BTC/USD

 

Recovering over 11.50%, from its January 13 lows of $88,900, BTC/USD has shown amazing resiliency. Technical indicators point to a positive trend; daily chart shows Bitcoin developing a bullish engulfing pattern and creates support above the pivotal $95,350-$96,150 zone.

Comprising accumulation, manipulation, and distribution phases, a clear “power of 3” technical arrangement has developed. With analysts determining $103,000 as the next major liquidity zone, this pattern points to possible more higher movement. Usually indicating institutional orientation, the configuration may also imply more significant future movements ahead.

Bitcoin Price Analysis

Although the immediate price target is on the $100,000 level, analysts believe that, given present momentum, Bitcoin might hit $103,000 before the presidential inauguration. Market players are still wary of further volatility, though; several analysts caution that a revisit of $90,000 support levels cannot be completely excluded.

Though the direction is yet unknown, the narrowing of Bollinger Bands to their closest range in a year points to an approaching period of notable market change. Trading company QCP Capital notes that markets will require time to acclimate to the policies of the new government and advised caution around the inauguration period.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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