Bitcoin traded within a range last week, exhibiting sensitivity to external factors. Despite a short-term dip, technical indicators suggest a continued bullish trend. Experts attribute the current consolidation to Jerome Powell's inflation warnings, Donald Trump's trade policy pronouncements, and the Federal Reserve's pause in rate cuts. However, despite these short-term headwinds, long-term projections remain optimistic, with analysts predicting significant price increases in the coming years.
Bitcoin (BTC) traded within a range of $91,200 to $102,500 last week, exhibiting heightened sensitivity to external market influences. By week's end, it experienced a 1.6% decline, settling at $97,800. Despite this short-term correction, technical indicators suggest that the long-term bullish trend for Bitcoin remains intact, according to Tracy Jin, Vice President of cryptocurrency exchange MEXC.The current consolidation phase in Bitcoin's price is attributed to several key factors.
Jerome Powell's December 2024 speech, where he cautioned about the potential for a second wave of inflation in the United States, cooled investor enthusiasm for riskier assets, including cryptocurrencies. This sentiment was further compounded by the Federal Reserve's decision to maintain interest rates unchanged. Additionally, statements made by Donald Trump after his inauguration, advocating for a stringent economic policy including new trade tariffs against Canada, Mexico, and the European Union, contributed to market uncertainty. Concerns over potential trade wars prompted investors to seek refuge in the US dollar, traditionally leading to a decrease in interest in Bitcoin and other crypto assets. The Fed's actions, particularly the pause in active rate cuts, have a direct impact on market dynamics, favoring the US dollar over risk assets. Experts predict that this pause will likely persist until June 2025, contingent upon consistent declines in inflation. Bernstein analysts forecast Bitcoin reaching $200,000 by the end of 2025, while analyst Michael van de Poppe anticipates a potential surge to new highs within 2-3 weeks if Bitcoin sustains its price above $90,000. Conversely, Ark Invest CEO Cathie Wood believes the chances of Bitcoin reaching $1.5 million have significantly increased, driven by institutional investors' growing interest in digital assets. Overall, experts agree that the Bitcoin and Ethereum (ETH) market is currently at a crucial consolidation stage. Short-term investor focus remains on the $95,000 level. A breakout above this level could exert further upward pressure on the cryptocurrency. However, in the long term, with the anticipation of the Fed easing its policy, Bitcoin is poised to continue its upward trajectory, potentially reaching new all-time highs
BITCOIN CRYPTOCURRENCY INFLATION FEDERAL RESERVE ECONOMIC POLICY TRADE WARS
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