Trump-Fuelled Bitcoin Rally May Fade Ahead Of January FOMC Meeting: Report

Ash Tiwari

5 months ago

3 mins read

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A recent report by digital assets research firm 10x Research highlights that the US Federal Reserve’s (Fed) stance on interest rate cuts remains the most significant hurdle that could dampen the current Bitcoin (BTC) rally.

Bitcoin’s Trump-Fuelled Rally At Risk Ahead Of FOMC Meeting

Since pro-crypto Republican candidate Donald Trump secured victory in the November presidential election, Bitcoin has climbed an impressive 47%, rising from approximately $67,500 on November 4 to around $99,700 as of January 6.

While further gains are anticipated during the so-called “Trump rally” leading up to the January 20 inauguration, the momentum might stall ahead of the Federal Open Market Committee (FOMC) meeting later in January, says 10x Research’s Markus Thielen.

Thielen predicts a “positive start” to January for BTC, followed by a slight dip before the Consumer Price Index (CPI) inflation data release on January 15. A favorable CPI report could reignite optimism, potentially fueling another rally before Trump’s inauguration. However, Thielen cautions that bullish momentum may wane ahead of the FOMC meeting on January 29.

Latest data from CME Group’s FedWatch tool shows that interest rates are likely to remain unchanged following the upcoming FOMC meeting. The tool currently predicts a 90.9% chance of interest rates remaining 425 and 450 basis points (BPS).

Bitcoin’s decline of approximately 15% to $92,900 following the December 18 FOMC meeting underscores the Fed’s significant influence. This drop came after the Fed signaled only two rate cuts for 2025 instead of five, reinforcing Thielen’s view that the Fed’s decisions are the “primary risk” to BTC’s current bullish trajectory. Thielen stated:

We anticipate lower inflation this year, though it may take some time for the Federal Reserve to recognize and respond to this shift formally.

Thielen also cited institutional participation as a key factor influencing Bitcoin’s short-term price action, with metrics like stablecoin minting rates and crypto exchange-traded fund (ETF) inflows serving as indicators of institutional interest.

Institutional Interest In Bitcoin Continues To Rise

Although US spot Bitcoin ETFs faced significant outflows at the end of December, fresh inflows have sparked optimism about rising institutional interest in the premier cryptocurrency. Data from SoSoValue notes that spot Bitcoin ETFs saw $908 million in inflows on January 3.

In addition, several major BTC mining firms such as MARA and Hut 8 are bolstering their BTC reserves. Technology firms such as Canada-based video-sharing platform Rumble also recently unveiled a $20 million BTC treasury strategy.

A separate report by cryptocurrency exchange Bitfinex predicts Bitcoin could surge to $200,000 by mid-2025, despite minor price pullbacks. At press time, BTC trades at $101,555, up 3.7% in the last 24 hours.

Featured image from Unsplash, charts from 10x Research, CME FedWatch and Tradingview.com

Ash Tiwari

Ash is a dedicated crypto researcher and blockchain enthusiast with a passion for diving deep into the evolving world of decentralized technologies. With a background in writing and a natural curiosity for how digital assets are shaping the future, he has immersed himself in various sectors of the cryptocurrency space, including decentralized finance (DeFi), NFTs, and liquidity mining. His journey into crypto started with a desire to fully understand the technology behind it, leading him to explore and engage with these systems firsthand.

Ash’s approach to DeFi goes beyond surface-level research as he actively participates in decentralized protocols, testing their functionality to gain a deeper understanding of how they operate. From experimenting with staking mechanisms to exploring liquidity mining strategies, he is hands-on in his exploration, which allows him to provide practical, real-world insights that go far beyond theoretical knowledge. This immersive experience has helped him develop a comprehensive grasp of smart contracts, token governance, and the broader implications of decentralized platforms on the future of finance.

In the NFT space, Ash’s interest is driven by the technology’s potential to reshape ownership and creativity in the digital age. He has explored various NFT projects, gaining insights into how these digital assets function within different ecosystems. His focus is on understanding the evolving relationship between creators and communities, as well as the innovative uses of blockchain technology to establish authenticity and provenance in the digital world. Ash’s research in this area often touches on the intersection of culture, technology, and community-driven projects.

A key area of his expertise lies in liquidity mining, where he has engaged with various decentralized platforms to understand how liquidity provision contributes to the functionality and security of DeFi ecosystems. Ash’s hands-on involvement has allowed him to analyze the risks, rewards, and broader implications of liquidity pools, giving him a well-rounded perspective on this integral part of DeFi. His understanding of risk management and protocol design allows him to provide insights into how these systems can be navigated effectively, with an emphasis on both opportunity and caution.

When it comes to communicating these complex topics, Ash’s writing is grounded in clarity and depth. He excels at breaking down intricate blockchain concepts into easily digestible information for a wide audience. Whether explaining the workings of decentralized exchanges or outlining the future potential of blockchain technology, Ash ensures that his content is accessible to both those new to the space and experienced participants looking for deeper insights.

Beyond DeFi and NFTs, Ash explores a wide array of emerging blockchain applications. His research spans areas like cross-chain technologies, decentralized governance, and blockchain’s potential to integrate with traditional finance. He is continuously learning and adapting to the latest developments, ensuring that his insights are both timely and relevant. His interest extends to how these technologies are creating new possibilities for decentralization, transparency, and trust in a variety of industries.

Ash’s commitment to engaging with the crypto space firsthand gives him a unique perspective that goes beyond what can be learned from research alone. His practical involvement allows him to stay ahead of the curve, offering readers and enthusiasts a clear and comprehensive understanding of the rapidly evolving world of blockchain. Whether delving into the technical mechanics of DeFi or exploring the cultural impact of NFTs, Ash’s approach is always rooted in curiosity, research, and a desire to make this technology accessible to all.

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