The world of Bitcoin has been buzzing with excitement, as some big factors could either push the price to new heights or cause a sudden dip. A recent analysis by Markus Thielen from 10x Research sheds light on what might happen to Bitcoin’s price in January 2025, especially with some big events around the corner.
The “Trump Effect” on Bitcoin: What’s Coming?
Markus Thielen believes that Bitcoin could experience a “Trump-led rally” as we approach Donald Trump’s presidential inauguration on January 20. This is based on the idea that Trump’s political presence often stirs market excitement, and people might see this as a good time to invest in Bitcoin. The early days of January are expected to be positive, with Bitcoin potentially seeing a price surge.
However, here’s where things get interesting. Thielen predicts that after an early January rally, Bitcoin might face a slight pullback ahead of some key data releases and the first major decision from the U.S. Federal Reserve (Fed) later in the month. On January 15, the Consumer Price Index (CPI) inflation data will be released, and that could significantly impact the market. If inflation is lower than expected, it could fuel optimism and push Bitcoin’s price up again. But then, Bitcoin’s momentum might start to slow as the Fed prepares to meet on January 29 to discuss interest rates.
The Fed’s Impact on Bitcoin: The Risk You Should Know About
The real threat to Bitcoin’s price surge, according to Thielen, lies in the Federal Reserve’s interest rate decisions. The Fed controls U.S. monetary policy, which includes deciding how much money costs to borrow, and that can make a big impact on Bitcoin.
Currently, there’s an 88.8% chance that the Fed will keep interest rates between 4.25% and 4.5% after their meeting on January 29. When the Fed makes its announcements, especially if they don’t signal any dramatic changes, Bitcoin could face a significant drop. This happened recently on December 18 when Bitcoin fell almost 15% after the Fed reduced its 2025 interest rate cut projections. Thielen sees this as the “primary risk” to Bitcoin’s potential rally this year.
What Should You Expect from Bitcoin’s Price?
Even with these risks, Thielen is still optimistic. He expects Bitcoin’s price to reach around $97,000 to $98,000 by the end of January 2025. Some other crypto experts are even more hopeful. John Glover from Ledn believes Bitcoin might temporarily dip to around $89,000 before a bigger rally toward $125,000 by the end of Q1. However, Glover also predicts that Bitcoin could retrace and move back to around $100,000 before eventually pushing towards a much higher price of $160,000 by late 2025 or early 2026.
Why Does All This Matter?
Understanding the interplay between events like Trump’s inauguration, inflation data, and the Fed’s decisions is crucial if you want to navigate the ups and downs of Bitcoin. These factors could either help Bitcoin reach new heights or cause it to pull back. And while the short-term outlook is a bit shaky, the longer-term view remains optimistic, with predictions pointing toward significant growth.
If you’re looking to increase your knowledge in this field, keep an eye on these key elements:
- Trump’s Inauguration – Could spark excitement and push Bitcoin’s price up.
- The Fed’s Interest Rate Decisions – A major risk factor that could dampen Bitcoin’s momentum.
- Inflation Data – Positive inflation data could drive optimism in the market.
- Institutional Investors – Their return to the market (through stablecoins and Bitcoin ETFs) could fuel longer-term growth.
The market is volatile, but understanding these trends helps you make informed decisions. The Bitcoin world is full of ups and downs, and this January could be one of those moments when huge movements happen.
