Crypto traders are upbeat again, expecting bitcoin (BTC) to surpass record highs amid choppy trading as pro-crypto President Donald Trump’s Jan. 20 inauguration approaches.
The price of bitcoin, the largest cryptocurrency, is up 11% from Monday’s lows below $90,000. It has risen nearly 3% over the past 24 hours, topping $100,000 at one point, CoinDesk data shows.
The move into the six figures, which spurred risk-taking in the broader market, followed a softer-than-expected core CPI report that fended off hawkish Fed fears that had driven prices lower. Instead, markets are focusing on Trump’s swearing-in and a potential pro-crypto announcement on the first day in office.
“The removal of inflation fears paves the way for bitcoin to break through the strong $100,000 resistance level before Trump’s inauguration,” Matt Mena, a crypto research strategist at 21Shares, said in an email. “Such a milestone would not only be psychologically significant, but also technically, setting bitcoin up to surpass its $108,000 all-time high and establish new record levels as market optimism builds.” 21Shares is one of the world’s largest crypto-native issuers of Exchange Traded Products (ETPs).
“Trump’s well-documented support for pro-growth policies and his track record of favoring asset price appreciation further reinforces the bullish outlook for bitcoin and risk assets more broadly,” Mena wrote.
The bullish forecast is in line with a rise in traditional assets, particularly the Nasdaq 100, which rose more than 2% on Wednesday. BTC recently strengthened its positive correlation with the tech-heavy index to a two-year high.
Meanwhile, gains in the dollar index, which measures the dollar’s value against major fiat currencies, have stalled, providing a lifeline to the risk assets, and the S&P 500 has approached the key 6,000 level.
According to Mena, a break above 6,000 “could push the stage to the next stage of the global bull market.”
Once a skeptic of digital assets, Trump courted the crypto community in the months leading up to the November election, pledging to create a national strategic bitcoin repository. His victory helped propel BTC to over $108,000 from $70,000 to over $108,000.
“If Trump indicates on day one that he’s going to create the strategic bitcoin reserve, even if he doesn’t sign it on day one, expect price discovery to be asymmetric,” said Nathan Cox, the chief investment officer at Two Prime. an email. “Once through the previous highs of $108,000, there is no limit to how quickly it can expand given the unmatched demand a bitcoin reserve strategy could have globally.”
Two Prime is an SEC-regulated registered investment advisor specializing in digital asset derivatives.
Volatility likely
Paul Howard, a senior director at crypto market-making firm Wincent, said expected announcements related to regulation of the digital asset industry, banking regulations and creation of the strategic bitcoin reserve have not been fully priced in yet.
“We are positioned for a volatile week ahead with the change of administration in the US expect to see some +/-10% movement across the majors such as BTC, SOL, ETH and XRP. Pricing will reflect the results of announcements from the incoming messages President, so opportunities, probably not everything, are baked into the current price,” Howard said.
