Key Takeaways
- The latest inflation numbers suggest that the U.S. Federal Reserve could cut interest rate on the dollar by 25 basis points. This speculation has led to a mini resurgence in Bitcoin’s price as it climbed to $101,100.
- Wednesday’s CPI Inflation report seemingly met the expectations of the central bank and with the Federal Open Market Committee scheduled to meet next week, the crypto and equity markets are already surging.
- Crypto whales made most of Bitcoin’s consolidation period by “buying the dip”. It is estimated that over 300 new wallets containing 100 BTC ($10 million) were created after prices dropped from $104,000 to $90,000 last week.
- Prominent crypto analyst Ali Martinez is forecasting Bitcoin to target an all-time high of $275,000 following the FOMC meeting, but many suggest the market could slow down as investors book their profits.
The price of Bitcoin (BTC) has renewed a climb past the $100,000 mark after the latest U.S. CPI inflation data released on Wednesday suggested that the Federal Reserve could be preparing for another rate cut.
Bitcoin Rises Above $100,000 Amid Positive U.S. Inflation Numbers And Expected Rate Cuts
After consolidating around $96,000 for a little while, BTC staged a strong bounce back, rising by 3.5% in the last 24 hours to record a peak of $101,000. The bullish sentiment comes amid the Federal Open Market Committee (FOMC) meeting scheduled next week, where the central bank is expected to announce its new reduced rates, which market analysts are hopeful may trigger a new all-time high for Bitcoin.
President-elect Donald Trump’s moves to undo the Biden administration’s crackdown on the crypto sector in favor of friendlier policies helped push BTC to an all-time high of $104,000 on December 3, 2024. However, the flagship crypto asset struggled to stay at the six-figure level as investors decided to take out profits.
Wednesday’s U.S. CPI inflation report fueled optimism across the global equity and crypto markets as last month’s numbers met forecasts, cementing investor expectations for a modest 25 basis points reduction in borrowing interest rate on the dollar during the upcoming FOMC meeting. The prospect of a more lenient monetary condition soothed investor sentiment, sending tech-heavy stocks and cryptocurrencies to record highs.
Experts estimate a 97% chance of rate cuts, which would prove to be a catalyst for a thriving U.S. and global economy as Trump takes office as the 47th President. Given the strong correlation between the equities and crypto markets, the price of Bitcoin has seen a quick surge above $100,000.
Whales Buy The Bitcoin Dip And Crypto ETFs Record Positive Net Inflows
When the BTC price consolidated at around the $96,000 range, whales made sure to accumulate large amounts of the token. As per data provided by crypto analyst Ali Martinez, 342 wallets holding more than 100 BTC ($10 million) were created as the price dropped from $104,000 to $90,000. This indicates that large-scale investors are capitalizing on the opportunity to accumulate more Bitcoin at lower prices.
On the other hand, inflows into spot Bitcoin ETFs have continued at a good pace over the past week. During the last nine trading sessions, the US Bitcoin ETFs witnessed net positive inflows, with BlackRock’s IBIT hitting a new milestone by crossing $35 billion in total net inflows since its launch in January 2024. Equivalent products for Ether, have attracted $2.4 billion in net inflows since their debut.
Market analysts are making some bold predictions for Bitcoin. Ali Martinez has forecasted a potential rise to $275,000, which is based on the “cup and handle” formation on the token’s price chart. The analyst has advised investors to “buy the dip”, but warned against overleveraging.
Historically, the price of Bitcoin tends to rally after declining ahead of U.S. inflation reports. This is because stable data tends to subside market concerns about a spike in inflation figures. While its price could reach much higher levels through the year-end, analysts at 10x Research expect limited market booms as many investors will be closing their books following the FOMC meeting.
Meanwhile, the altcoin market is showcasing greater relative strength over Bitcoin. Even today, the sector witnessed a strong surge as market leader Ethereum’s (ETH) price increased by over 7%. Other major altcoins like Ripple (XRP), Binance Coin (BNB), Solana (SOL), and Dogecoin (DOGE) also registered modest gains of 4-5% each. Bitcoin is up roughly 50% since Donald Trump’s victory in the U.S. election on November 5.
At the time of writing, Bitcoin (BTC) is trading at $100,592 – up 2.3% in the last 24 hours.
Also Read: IcomTech Ponzi Ordered To Pay $5 Million by Federal Court for Crypto Scamming
