Last week, Bitcoin traded in the range of $91,200 - $102,500 during the week, demonstrating high sensitivity to external factors. By the end of the week, it lost 1.6%, falling to $97,800. However, the technical picture indicates a continuation of the long-term uptrend, despite the current correction, according to Tracy Jin, Vice President of cryptocurrency exchange MEXC.
The Impact of the Fed and Macroeconomics on the Crypto Market
The current consolidation of BTC was prompted by Jerome Powell's speech in December 2024, where he warned of the risk of a second wave of inflation in the United States. This statement cooled investor interest in risky assets, including cryptocurrencies, as the Fed left interest rates unchanged.
Jin notes that the crypto market was also influenced by statements by Donald Trump, who after the inauguration began to actively promote a tough economic policy, including new trade tariffs against Canada, Mexico, and the EU. This raised concerns about new trade wars, which forced investors to seek refuge in the US dollar. The growth of the dollar traditionally leads to a decrease in interest in Bitcoin and other crypto assets.
However, Trump's policy will not have a long-term impact on the cryptocurrency market, according to Tin. The key driver for BTC and ETH remains the Fed rate:
"The Fed's actions are systemic and they directly affect what is strengthening in the market — the dollar or risks. That said, the phase of active rate cuts is most beneficial for the growth of cryptocurrencies. Now it is on pause and, most likely, will remain on it until June 2025. The Fed needs to see a steady decline in inflation in the country for several months in a row to lift this pause."
Forecast and expectations
Bernstein analysts predict that Bitcoin will reach $200,000 by the end of 2025. However, short-term fluctuations will depend on inflation data and the state of the labor market in the United States.
Analyst Michael van de Poppe predicts that Bitcoin can repeat the trajectory of gold and set new highs within 2-3 weeks if it stays above $90,000.
At the same time, Ark Invest CEO Cathie Wood said that the chances of BTC reaching the $1.5 million mark have increased significantly, as institutional players continue to increase their positions in digital assets.
Thus, according to Tracy Jin and other experts, the BTC and ETH market is at a key stage of consolidation. In the short term, investors are focused on the $95,000 level. A breakout there could increase pressure on the cryptocurrency, but in the long term, with the Fed easing its policy, Bitcoin remains on track to reach new all-time highs.