Key Points
- Bitcoin maintains its position above $90k despite two major market crashes.
- Upcoming macroeconomic factors including Trump’s inauguration and the Fed meeting could impact Bitcoin’s stability.
Bitcoin continues to hold its ground in the face of market volatility, maintaining a steady position above $90k. Despite two major market crashes in less than a month, the cryptocurrency is seemingly defying the odds and showcasing resilience.
Bitcoin: A Game of High Stakes
The market is currently in a state of anticipation, waiting for the next Trump trade to kick off. However, the stakes are extremely high. Bitcoin’s reputation as a safe haven is being put to the test, but it seems to be proving its worth. Despite falling from a yearly high of $102k a week ago, Bitcoin has only dropped by 7%.
With Trump’s inauguration on the horizon, speculation is rife about a potential repeat of the Q4 rally that saw Bitcoin surge to $108k. For many investors, holding on to their Bitcoin seems like a smart move. However, there’s a catch. The scale of losses during the recent dip was hard to ignore. Around 1.9 million BTC, bought at $106k, are at risk of being sold once Bitcoin hits that price, potentially triggering a massive $201 billion sell-off.
Greed, Fear, and Bitcoin
Historically, strong rallies are often driven by investor greed. When greed takes over, investors are more willing to risk it all, believing the potential for higher returns outweighs the threat of a crash. However, with numerous macroeconomic factors in play, fear could easily take over the market. If that happens, a crash could quickly become a reality.
The January Fed meeting, Trump’s inauguration, and the release of the last CPI and PPI inflation data before the Fed’s decision could all impact Bitcoin’s market stability. With inflation currently at 2.7%, well above the Fed’s 2% target, it’s likely the central bank will remain hawkish, potentially triggering a market pullback.
Given these factors, panic-selling might increase as Bitcoin hits key levels. The Trump trade could be in jeopardy, and Bitcoin may face a challenging year ahead. The long rally is under pressure, and fear could potentially take over, making exiting the safer move.
