Bitcoin price probably ‘chops’ between $100K to $100K range until FOMC meeting

With the dust settling around the “Trump pump” trade, Bitcoin (BTC) price has established a range between $100,000 and $110,000 since the newly elected US president joined office. The crypto asset jumped 3.78% on Jan. 21, but its price action has started to consolidate over the past 24 hours. 

With BTC failing to demonstrate a clear directional headwind on the lower time frame (LTF), one analyst believed that the sideways movement might extend until the end of the month. 

Will quantitative easing fuel Bitcoin’s next rally?

Krillin, a full-time crypto trader, hinted at the possibility of sideways consolidation between $100,000 and $110,000 until the Federal Open Market Committee (FOMC) meeting takes place on Jan. 28-29. The trader said, 

“Assuming no BoJ scam, we likely chop between 100k and 110k till FOMC end of month.”

The analyst indicated the possibility of another dump since the current expectation is that there will be no interest rate cuts on Jan. 29. The CME FedWatch tool currently projects a 99.5% chance that interest rates will remain unchanged at 4.25% to 4.5%. 

However, a dovish press conference or any hints at Quantitative Easing (QE) to address market functioning might trigger the next leg up for risk assets. 

Data suggests that as of Jan. 22, the US national debt stands at $36.21 trillion, more than the allotted amount of $36.1 trillion. With the debt ceiling reached now, the forecasted solution is to raise it again. This is not new for Congress, with the administration adjusting the debt ceiling 78 times since 1960. 

This might lead the government to finally partake in quantitative easing (QE), where the US Federal Reserve could resort to large-scale asset purchases. This would inject liquidity into the market, a positive catalyst for risk assets. One particular way to track liquidity injection would be to identify a reversal in the Fed’s balance sheet trends. The balance sheet has declined since April 2022, falling from almost $9 trillion to $6.8 trillion on Jan. 15 because of Quantitative Tightening (QT).

Yet, the above pathway remains subjected to market speculations, and a more transparent path will only be evident after Jan. 28 and Jan. 29. 

Related: US Bitcoin reserve idea sparks Davos debate on crypto’s future

Bitcoin capital inflows dropped after $100K was hit

While the market expected Bitcoin to enter a period of price discovery and aggressive bullish action after $100,000, data from Glassnode indicated the lack of fuel after the milestone was reached. 

As illustrated in the chart, the BTC’s realized cap net position change has dropped from 12.5% to under 5% since November 2024. This implies that the amount of BTC moved at prices above $100,000 is relatively less than in early December 2024. Similarly, the data analytics platform reported that, 

“Net realized profit-taking peaked at $4.5B in Dec 2024, and is now down to $316.7M (-93%). This reduction in sell-side pressure suggests the market is resetting to a state of supply-demand balance.”

The above data shows that liquidity remains thin in the Bitcoin markets. Despite these concerns, Bitcoindata21 said the total crypto market cap would “double” in six to eight weeks. Based on a weekly technical analysis, the analyst mentioned that “$150K for Bitcoin” is still possible, saying, 

“Weekly RSI bouncing from bottom of trend channel, just like March 2017 and September 2020 (see red circles). As long as we stay inside the channel, the bull market is not over.”

Related: Watch these Bitcoin price levels next with ‘door open’ to $100K retest

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.