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Bitcoin Faces Volatility Ahead of US Presidential Inauguration: Traders Prepare for a Shifting Market

Writer's picture: meowdinimeowdini

Bitcoin is gearing up for potential volatility as traders prepare for the upcoming US presidential inauguration on January 20. BTC/USD has been trading within a range, but with key levels standing out, experts anticipate possible surprises in the market.

After briefly spiking to near $96,000, Bitcoin quickly returned to the mid-$90,000 zone, signaling a consolidation phase. Traders are closely monitoring the range, with notable levels identified by popular trader CrypNuevo at $91k and $96k for potential liquidations. A breakout above $104,700 could also trigger further movements in the market.


Bitcoin coin on a computer motherboard CPU socket. The coin's golden hues contrast with the dark intricate circuits, symbolizing technology.
Bitcoin poised for potential volatility as January 20 nears, with inflation data and a strong US dollar influencing the crypto market.

This week, macroeconomic data will also play a role in shaping market sentiment. Key inflation prints, such as the Consumer Price Index (CPI) and Producer Price Index (PPI) for December, are expected to impact Bitcoin’s price trajectory. The Federal Reserve has been tightening its stance on interest rates, signaling that rate cuts may be off the table, which could influence investor sentiment and capital inflows into risk assets, including Bitcoin.



In addition, the US dollar is riding high ahead of the inauguration, and its strength could pose a headwind for Bitcoin, as historically, a strong dollar correlates with downward pressure on the crypto market. Bitcoin’s performance could be further influenced by the Fed's reaction to dollar strength and its ongoing struggle to manage inflation.


Despite these challenges, there are positive signs emerging for Bitcoin. According to CryptoQuant, Binance’s buy/sell ratio is showing that sellers are weakening and buying demand is rising. The decline in BTC inflows into traders’ accounts further suggests that investors are leaning toward holding rather than selling their Bitcoin, indicating a potential shift in market sentiment.

With traders holding their breath for the US inauguration and key inflation data, Bitcoin's price could break out of its range—either pushing higher or dipping below $90,000 in the coming days. As the market awaits further developments, Bitcoin’s volatility may lead to significant price swings for the crypto asset.


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