- BTC maintained the $100K-$105K range ahead of the FOMC meeting.
- 21 Shares analyst projected that a surprise interest rate cut could rally BTC higher.
Bitcoin [BTC] has defended the $100K level ahead of key macro updates—the Fed rate decision and PCE inflation data.
For the Fed decision, the market expects ‘no rate cut’ with interest traders pricing >99% chance of rate pause.
However, Matt Mena, crypto research strategist at 21 Shares, told AMBCrypto that a surprise 25bps cut could help the market rally. He said,
“Given the recent turmoil in equities, the likelihood of a rate hike is effectively zero. However, a surprise 25bps cut could act as a major tailwind, sparking a rally across risk assets.”
In particular, the market will closely monitor the Federal Open Market Committee (FOMC), forward guidance, and Chair Jerome Powell’s press conference to gauge the next market direction.
Will FOMC heed Trump’s call?
The fact that President Donald Trump has openly called for interest rates to be dropped will make the forward guidance a must-watch. Mena added that,
“If the Fed signals two or more cuts, it could provide the kind of 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 reiterated inflation concerns 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.
A cooler-than-expected data could rally BTC, while the opposite could tank it.
Simply put, the next 48 hours could drive market volatility as players adjust to the above announcements and data.
In fact, 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.
Source: Amberdata
The 25RR was positive for the Friday Option expiry, indicating a premium for calls (bullish bets). This suggests a slightly bullish sentiment for the expected inflation data.
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.
Source: BTC/USDT, TradingView
