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17.01.202509:20 Forex Analyse & Reviews: Bitcoin Kicks Off the Party

Relevance up to 02:00 2025-01-22 UTC--5

Bitcoin looks poised for a celebratory rally ahead of Donald Trump's inauguration, as the president-elect has pledged to make America the global hub for cryptocurrency. Insider reports from Bloomberg indicate that Trump intends to prioritize digital assets in U.S. policy. Initiatives may include establishing a crypto advisory board to protect the industry and creating strategic reserves in Bitcoin. Is the BTC/USD rally really surprising?

Market sentiment suggests that even a neutral stance from Trump on digital assets would be beneficial for the crypto sector. However, his shift from being a crypto skeptic to embracing digital currencies serves as a positive signal for BTC/USD bulls. With Bitcoin already having rallied by 50% since Trump's election victory, the question arises: will this turn into a "buy the rumor, sell the fact" situation?

Crypto enthusiasts argue that investors who take profits now might miss out on the larger picture. Trump is expected to enact several crypto-friendly laws that could drive BTC/USD prices even higher. Coupled with an improving risk appetite and Bitcoin's correlation with the Nasdaq 100 index reaching a two-year high, the overall outlook remains bullish.

Bitcoin and Nasdaq 100 Performance Trends

Exchange Rates 17.01.2025 analysis

During his first term, Trump was particularly focused on stock market performance, seeing it as a key indicator of his presidency's success. It's unlikely that his perspective has changed. The potential for strong corporate earnings, excitement surrounding quantum computing, and the Federal Reserve's possible return to rate cuts amid slowing inflation and economic activity all support the case for stocks and riskier assets, including Bitcoin.

Recent remarks from Christopher Waller of the Fed, suggesting that monetary policy might be eased as soon as March if inflation continues to slow, have further fueled the rally in the Nasdaq 100 and BTC/USD.

Bitcoin is also benefiting from reports of pension funds in the U.S., Australia, and the U.K. entering the crypto space. With Bitcoin experiencing a 120% rally in 2024 and gaining support from the incoming U.S. president, these institutions are increasingly compelled to include digital assets in their portfolios.

Exchange Rates 17.01.2025 analysis

JP Morgan estimates that specialized exchange-traded funds (ETFs) focusing on alternative tokens like Solana and XRP could attract $14 billion in investments.

On a technical level, the BTC/USD pair is forming an Expanding Wedge pattern on the daily chart. A decisive breakout above point 5, which is near the $102,800 mark, would increase the likelihood of a resumed uptrend and create a strong basis for making purchases. Conversely, if the breakout fails, it could trigger a reversal pattern, presenting selling opportunities for Bitcoin.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Marek Petkovich,
Analytical expert of InstaSpot
© 2007-2025
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