Following the initial surge from the “Trump pump” trade, Bitcoin’s price has stabilized between $100,000 and $110,000 since the inauguration of the newly elected U.S. president. On Jan. 21, the crypto asset saw a 3.78% jump, but its price movement has since consolidated within this range over the last 24 hours. With no clear directional momentum on the lower time frame (LTF), one analyst predicts that this sideways trend could persist for the rest of the month. Will quantitative easing spark Bitcoin’s next rally? Krillin, a professional crypto trader, suggested that Bitcoin might continue its consolidation until after the Federal Open Market Committee (FOMC) meeting on Jan. 28–29. He stated, “Assuming no BoJ scam, we likely chop between 100k and 110k till FOMC end of month.” The analyst also hinted at a potential dip, given that interest rate cuts are not expected during the meeting. According to the CME FedWatch tool, there is a 99.5% likelihood that interest rates will remain unchanged at 4.25%–4.5%. However, dovish comments or hints at quantitative easing (QE) could drive risk assets higher. As of Jan. 22, U.S. national debt reached $36.21 trillion, surpassing the $36.1 trillion ceiling. Congress may raise the debt limit again, as it has done 78 times since 1960. If QE becomes a reality, the Federal Reserve may inject liquidity into the market through large-scale asset purchases, a scenario that would likely benefit Bitcoin. Tracking a reversal in the Fed’s balance sheet, which has declined from $9 trillion in April 2022 to $6.8 trillion as of Jan. 15, could provide further insight. Bitcoin’s capital inflows have slowed While the market anticipated aggressive bullish momentum after Bitcoin surpassed $100,000, data from Glassnode shows a decline in capital inflows. BTC’s realized cap net position change fell from 12.5% to under 5% since November 2024. Glassnode reported, “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.”
