Key Points
- Bitcoin [BTC] has defended the $100K level ahead of the Fed rate decision and PCE inflation data.
- A surprise interest rate cut could rally BTC higher, according to Matt Mena, crypto research strategist at 21 Shares.
Bitcoin [BTC] has maintained its stance at the $100K mark in anticipation of key macro updates. These include the Federal Reserve’s rate decision and PCE inflation data.
The market anticipates no rate cut, with interest traders pricing a more than 99% chance of rate pause. However, Matt Mena, a crypto research strategist at 21 Shares, suggests that an unexpected 25bps cut could trigger a market rally.
The Market’s Focus
The market’s attention will be on the Federal Open Market Committee (FOMC), forward guidance, and Chair Jerome Powell’s press conference to predict the next market direction.
The President’s public call for interest rates to drop will make the forward guidance a key watch. Mena suggests that if the Fed signals two or more cuts, it could provide the catalyst needed for Bitcoin to break above $110,000 and test the next key psychological levels at $125,000 and $150,000.
The Fed has voiced concerns about inflation if the President’s wide-ranging tariff program is implemented. The Fed’s favorite inflation data, the Personal Consumption Expenditure (PCE) price index, will be released on January 31, a day after the Fed meeting.
Market Predictions
The next 48 hours could drive market volatility as players adjust to the announcements and data. The Options market showed a slightly bearish sentiment and hedging activity, as illustrated by a negative 25RR (25-Delta Risk Reversal) for the 30th of January expiry.
On the price chart, Bitcoin has remained in the $100K-$105K range since the 17th of January. It has stayed above key short and long-term Moving Averages (MA), reinforcing a positive outlook. However, a drop below the 50-day MA of $98K could accelerate a decline to the range-low of $91K.