Yesterday, Bitcoin recovered much of the ground lost during the recent bear sessions, driven by the positive sentiment for the imminent inauguration of Trump and the positive data on US inflation.
Investors seem to view the U.S. monetary landscape with optimism as preparations are underway for the new President’s entry into the White House.
Let’s see all the details below.
Summary
Bitcoin recovers 100,000 dollars driven by favorable inflation data and anticipation of Trump
Yesterday Bitcoin momentarily returned above 100,000 dollars thanks to the favorable push from the data on U.S. inflation.
At 14:30 (UTC+1), the much-anticipated consumer inflation data and the Producer Price Index (PPI) data for the month of December were released.
According to reports, the consumer price index (CPI) rose by 0.4%, in line with analysts’ expectations.
At the same time the annual inflation rate in the USA has reached 2.9%, slightly up from the previous figure of 2.7%, but also in line with forecasts.
Core inflation, excluding food and energy, increased by 0.2% month over month, but the annual core inflation rate fell by 0.1%, going from 3.3% to 3.2%.
These informations have triggered a subtle optimism in the risk-on markets, including the crypto one, which was not absent.
Bitcoin rose by 2% at the time of the CPI release, first reaching 98,900 dollars, and then extending above 100,000 dollars, before slightly retracing.
The reason for this bullish sentiment is due to the fact that the FED will be more inclined to make an interest rate cut with rising inflation.
Although the odds of a 25 basis point cut in January are very low, there remains the possibility of a shift to a slightly more expansive monetary policy throughout the course of 2025.
Data from derivative markets suggest the return of interest in speculations
Immediately after the release of the data on US inflation and the consumer price index, the derivatives on Bitcoin recorded a significant bull jump.
The open interest metric on the main cryptocurrency grew by about 500 million dollars in just one hour, highlighting the positive impact on the markets.
In particular, the OI of all exchanges futures and options on BTC increased from 29.7 to 30.2 billion dollars, continuing to grow in the following hours.
At the time of writing, the figure stands at 30.3 billion dollars with a Bitcoin price of 99,300 dollars, up by 2.28% in the last 24 hours.
In the meantime, the funding rate seems to have decreased slightly just after the publication of the inflation data, only to rise in the following hours.
According to the data from Coin Glass, the derivative volumes on Bitcoin have increased by 14.6% in the last 24 hours, reaching the threshold of 100 billion dollars.
According to what was reported by Burakkesmeci, a contributor to the analysis platform CryptoQuant, the US inflation data has amplified investors’ hopes regarding further rate cuts by the FED in 2025.
These are his words:
“This news brought smiles to the faces of cryptocurrency investors, signaling a positive change for risk-on markets. While the data painted a favorable macroeconomic picture, the cryptocurrency market experienced a strong rally”.
Bitcoin prepares for the impact of Trump’s inauguration
In addition to the data on US inflation, another factor that may have positively influenced the rise of Bitcoin seems to be the now imminent arrival of Donald Trump at the White House.
On January 20, the inauguration ceremony of the elected Republican will be held in Washington, who will officially become the 45th president in the history of the United States.
Many analysts see this event as a potential bull catalyst for Bitcoin, which is preparing to enter within Trump’s political-economic plan.
According to what was promised during the election campaign, the new president will push to enhance the worldwide adoption of the cryptocurrency.
In this regard, what attracts the most interest seems to be the possibility that Bitcoin becomes an asset of the American Treasury, held not as a liability but as an asset.
This means that, if Trump confirms what was said, the United States should start a purchase plan to bring the resource within the Treasury.
This translates into strong buying pressure on the crypto markets, in addition to the possibility that the same behavior will be imitated by other nations.
In support of this thesis, we report the news that the next US Secretary of the Treasury chosen by Trump is planning such a move.
At this moment, according to the prediction platform Polymarket, there is a 50% chance that Bitcoin will become a national reserve in the USA during 2025.
Needless to say, in the case of a positive outcome, Bitcoin will have a long way to go upwards alongside the new Trump administration.
The predictions on the price of Bitcoin in 2025: is the Trump effect coming?
According to Deribit Metrics data, investors in the options markets are positioned to capture the increase in Bitcoin prices thanks to the Trump effect.
For the expiration of March 28, 2025, we notice how the price level most watched by traders is that of 120,000 dollars, well above the current all-time highs.
There are very interesting call bets even at 110,000 dollars and at optimistic price levels like 130,000, 140,000, and 150,000 dollars.
Overall, the notional value is 8.4 billion dollars, with a call/put ratio of 0.40 indicating a prevalence of bullish sentiment.
Historically, Q1 of the year following the halving represents a very positive quarter for Bitcoin, and investors expect that this time it will not disappoint expectations either.
Moving to a broader time horizon, we can observe how the same bets placed on the options markets take on a different aspect.
For the expiration of December 26, 2025, the bull and bear polarize into two groups, each with a specific price target.
On one side, there are holders of put positions, who speculate a Bitcoin price below $80,000 by the end of the year.
On the other hand, we find the holders of call positions, who believe that Bitcoin, thanks to the new USA president Trump, will be traded even above 180,000 dollars.
In the middle or at the extremes of this enormous range, we see few bets, except for some call options at the fateful level of 200,000 dollars.
