Bitcoin surpasses $100,000 as political optimism leads to gains

Bitcoin prices rose above $100,000 on Wednesday, January 15, recovering from their recent high. Drop below $90,000 The anticipation surrounding crucial policy decisions has pushed the digital currency higher.

The world’s most valuable digital currency by market capitalization had surpassed $100,700 by 3:30 PM EST, according to Coinbase data from TradingView.

After rising to that local high, the cryptocurrency retreated again, falling to nearly $99,500 over the next few hours, additional Coinbase data from TradingView indicates.

However, the digital asset resumed its volatile journey, rising to nearly $100,900 at around 7pm EST. At this point, it is up more than 14% since falling to nearly $89,000 on Monday, January 13.

In offering explanations for what has fueled these recent gains, analysts highlighted a number of developments that could lead to bullish policy.

To begin with, many market watchers have emphasized the recent inflation reports, noting that the results reported by these reports may prompt Fed officials to take a less hawkish approach.

The Federal Open Market Committee’s (FOMC) decision to raise the target range for the benchmark federal funds rate by more than 500 points in less than two years created a major outlook as it put strong upward pressure on borrowing costs.

In addition to the government reports mentioned above, and their potential impact on monetary policy, some analysts highlighted the upcoming inauguration of President-elect Donald Trump, describing it as potentially benefiting the most prominent digital currency in the world.

Brett Sivling, Wealth Manager at Gerber Kawasaki Wealth Management and InvestmentsHe spoke to Possible Reason One, explaining via email comment that “it appears that today’s Bitcoin rally was sparked by today’s CPI report.”

He was referred to the Department of Labor announcement that revealed the Consumer Price Index for all urban consumers in December more At an annual rate of 0.4%.

“With today’s surprisingly strong inflation information, I assume market participants are more willing to take risks in the hopes that the report will translate into a more dovish Fed,” he specified.

“However, this theory is contradicted by the recently released strong jobs report. “Investors are weighing both reports with the hope that interest rate increases will pause in 2025,” Sivling stated.

Greg Magadini, Director of Derivatives at Digital Asset Data Provider AmberdataHe also mentioned these government reports in an email comment.

“The big constraint on US risk assets and Bitcoin has been the monetary environment since the FOMC meeting in December,” he noted.

“Yesterday, core PPI came in at +.1% (vs. median forecast +.3%) and today core CPI came in at +.2% (vs. +.3 median), despite a slightly higher CPI. Mainly because of oil prices,” Magadini continued.

“Together, this was really bullish as the inflationary environment looked less risky this week. Combining these macro expectations with the open on Monday, which promised to be bullish for the cryptocurrency industry, markets returned to Bitcoin’s $100,000 level.”

“This price level has been a magnet for options buyers and remains the largest source of concentration of traders’ inventory in Deribit,” Magadini said, referring to activity in derivatives markets.

Disclosure: I own some Bitcoin, Bitcoin Cash, Litecoin, Ether, EOS, and SOL.