- Bitcoin extends its recovery above 105k.
- The Federal Reserve leaves rates unchanged & is in no rush to cut.
- US GDP data up next.
- BTC ETF inflows are sluggish.
BTC/USD technical analysis
Bitcoin (BitfinexUSD) is building on yesterday’s gains as it rises above 105k despite the Federal leaving interest rates unchanged. Many altcoins are also rising, with Ethereum above 3200 and Solana at 240.
The Federal Reserve Leaves Rates on Hold
Bitcoin has risen above the 105K on Thursday adding to yesterday's gains despite the Federal Reserve keeping interest rates unchanged at 4.25% to 4.5% range, as expected, and shifting to a slightly more hawkish tone.
The Fed’s monetary policy statement highlighted solid growth and a resilient labour market. However, it also acknowledged a lack of improvement in inflation, which ticked higher to 2.8% YoY in December. Federal Reserve Chair Powell indicated that the Fed was in no rush to cut interest rates further and also hinted at a level of uncertainty surrounding the outlook for future cuts given potential policy changes from Trump.
Following the decision, treasury yields ticked higher, with the United States 10-Year briefly reaching 4.581%. The U.S. dollar index has risen back above 108.00, and Bitcoin gained 2.7%. The rise in Bitcoin is curious because the prospect of rates remaining unchanged for a longer period points to a bearish bias for risk assets, including cryptocurrencies.
BTC ETF demand remains weak
Bitcoin ETFs remain sluggish, with SoSoValue data showing BTC ETF net inflows of just $92 million on Wednesday, following $18 million on Tuesday and large-scale outflows on Monday. BTC ETF inflows would need to accelerate to support further gains in Bitcoin’s price.
However, it's also worth noting that, according to sentiment data, the number of Bitcoin wallets holding between 100 and 1000 BTS has risen to a new all-time high. This milestone points to sustained confidence among mid-sized whales.
US Q4 GDP up next
Looking ahead, attention now turns to US gross domestic product for the final quarter, which is expected to show a grace of 2.8% annualised, down from 3.1% in the third quarter of 2024. Stronger and expected growth could support the Fed's more hawkish stance and lift the US dollar while pulling riskier assets such as Bitcoin lower. However, weaker-than-expected data could boost Fed cut optimism and lift Bitcoin while dragging the USD lower.
While the macroeconomic backdrop has become less supportive of crypto at least in the near term, the broader crypto landscape continues to see encouraging developments, particularly since Trump returned to the White House.
In his first few days in office, Trump signed an executive order on crypto, and his administration is evaluating the potential for a national digital stockpile. While these developments have underwhelmed some, they are undeniably steps in the right direction for increased Bitcoin adoption.
BTC/USD technical analysis
BTC/USD spiked lower, finding support around the 50 SMA at 98.5k on Monday before recovering higher to close the day at 103.7k. BTC/USD has extended its recovery to 105.4k at the time of writing. The price respecting the 50 SMA combined with the RSI above 50 keeps buyers hopeful of further gains. Should bulls extend the recovery the price could retest the 109.5k record high.
Should sellers break below 100k and the 50 SMA at 99K, this could pave the way for a deeper selloff towards 90k. 