Bitcoin hovers around $104,000 today but may slip to $100,000 due to negative U.S. data on inflation and employment, says BitBank’s analysis.
“With Trump’s inauguration festivity behind, the crypto market is shifting focus to U.S. inflation data today and [the] jobs report next week,” explains BitBank market analyst Yuya Hasegawa.
Hasegawa points out that while inflation eased modestly in December it is still high. “sticky” The upcoming months will be marked by a rise in the price of goods and services. “economic data may not favor Bitcoin.”
Ethereum may be similar, even though it has outperformed Bitcoin after Bitwise’s BTC ETH ETF was approved by the SEC.
CoinGlass’ data shows that the net inflow of Ethereum ETFs has turned positive following several days where funds had been losing money. According to CoinGlass, these funds have added ETH valued at $67.8 millions to their books.
But if inflation numbers are downbeat today, it would suggest that the Federal Reserve is likely to stick by its current stance of refusing to lower interest rates. As of Friday morning, the Commerce Department's Bureau of Economic Analysis reported that the personal consumption expenditures (PCE) price index rose 0.3% last month after an unrevised 0.1% gain in November.
James Wo, the founder of Digital Finance Group suggested that when and if there is a market-wide easing in inflation expectations could rise quickly.
“The anticipated rate cuts will increase money supply which converts to greater spending power, often driving the bull market up,” He told Decrypt.
Hasegawa highlights Jerome Powell’s recent U turn on whether U.S. Banks should be working with crypto firms.
“Chair Powell’s comment was received as a hope that some level of further deregulation is on its way,” In a shared trading note, he stated that DecryptPowell said that Powell’s comments were in line with the removal last week of SAB 121, a restrictive accounting standard.
Digital Finance Group’s Wo also believes that Powell’s remarks are more than symbolic and will result in meaningful growth for the U.S. cryptocurrency market.
“It provides great significance as it now provides greater guidance for banks to serve crypto, reducing the grey areas and ambiguities that many institutions have faced in the past,” He explains.
Analysts have also pointed out other positive aspects for Bitcoin. 10X Research wrote yesterday that Donald Trump’s tariffs are already driving the price up of gold and may do so for Bitcoin’s largest cryptocurrency.
“393 metric tons of gold—valued at approximately $35 billion—have been moved into COMEX vaults in New York since the Trump election, pushing inventory levels up by 75%, the highest since 2022,” Analysts at the company write.
The price of gold is rising and this may increase the demand for a reserve asset. This already exists, given the recent efforts of various countries to create BTC reserves.
Stacy Elliott edited this article.