Written by: Rania Gule, Senior Market Analyst at XS.com – MENA
Bitcoin (BTC/USD) is currently going through a critical transitional phase amidst global financial market volatility. Today’s Monday trading began at $102,400, above its key moving average, with price zones becoming strategic focus points for investors. After a recent bounce above the support level at $91,735, following a drop to a low of $89,167, Bitcoin has demonstrated strong resilience, supported by clear institutional buying between the range of $89,167 and $94,508. In my view, this activity confirmed the role of these levels as key supply zones for strategic accumulation aimed at stabilizing prices and alleviating market panic, contributing to a strong recovery reaching $103,970 recently.
However, despite the recovery, I believe the $103,484 level still represents a key obstacle for further bullish movement. A breakout above this level could support additional gains, with the next resistance target at $105,820. Continued downward pressure, if this level is not breached, may lead to a return to the consolidation range between $91,735 and $101,931. Given the ongoing macroeconomic factors such as U.S. monetary policies and institutional adoption trends, Bitcoin’s future outlook remains bullish, contingent on the balance between supportive factors and influencing risks.
In my opinion, the financial markets have recently seen notable volatility following the release of the U.S. Consumer Price Index (CPI) for December, which has renewed some momentum for Bitcoin, keeping its price above the $100,000 mark. However, this slight increase was not sustainable, as Bitcoin experienced a small decline after the surge, highlighting the current instability in the market. While the U.S. economy strengthens with improving indicators such as those shown in the CPI data, the future outlook still carries significant challenges, and traders must closely monitor upcoming data, which may play a crucial role in determining Bitcoin’s future trends.
In my view, U.S. economic data remains a critical factor in shaping a clearer picture of the economic situation, potentially increasing Bitcoin’s volatility, and requiring traders to exercise caution. Strong data could support the U.S. dollar, which may pressure gold and financial markets, including Bitcoin. Therefore, I expect the U.S. dollar to see some upward movement, while risk assets like Bitcoin may face additional challenges, particularly if upcoming data shows that the U.S. economy is in strong shape, which could raise concerns for Bitcoin.
The idea of selling Bitcoin during the inauguration of the newly elected President Donald Trump may have become less convincing over time. The markets had priced in a lot of optimism for this event in November and mid-December, but caution and volatility have since taken over. This retreat in optimism may reflect a decline in traders’ confidence in Trump’s ability to make a strong impact on cryptocurrency markets, as seen in previous periods. While increased volatility was expected around the event, the current market response shows a more cautious and hesitant approach.
Although the general impression points to potential short-term price fluctuations, history indicates that markets usually experience a period of upward movement after presidential inaugurations. This reinforces the expectation that Bitcoin may rise in the coming months, benefiting from the economic policies that Trump may adopt, such as tax cuts and deregulation. These could serve as growth catalysts, thereby encouraging more interest in cryptocurrencies as alternative assets for investors.
I believe Trump’s inauguration could help stimulate financial markets, including cryptocurrency markets. Despite short-term volatility, the impact of economic policies that may follow in the new presidency should not be overlooked. Investors often favour markets during periods of relative stability, which suggests that Bitcoin could gradually rise once markets stabilize after the inauguration-related fluctuations.
I believe that although the markets may face some pressure in the near term, long-term analysis indicates that Bitcoin could remain on an upward trajectory, supported by the economic stimulus policies that Trump may strengthen. Traders should be prepared to interact with current volatility intelligently while maintaining a long-term bullish outlook. Despite Bitcoin’s temporary decline, the overall market trend remains positive, provided that economic data continues to support policies that could positively affect financial markets.
In conclusion, while Bitcoin still faces significant challenges in the short term, long-term market trends may be more positive. Therefore, traders should closely monitor U.S. economic data, as this could be the determining factor in Bitcoin’s near-term future. While some predictions indicate that volatility may persist in the market, future economic policies could further strengthen Bitcoin’s position as a safe financial asset for investors, supporting additional opportunities shortly.
