Cryptocurrency Bitcoin Breaks Past $100,000 Mark, Boosted by Positive Political Outlook
Bitcoin soared past the $100,000 mark on January 15, 2021, marking a significant recovery from its recent dip below $90,000. This surge was spurred by anticipation surrounding key policy decisions, propelling the digital currency higher.
Coinbase data from TradingView reported Bitcoin reaching a local high of $100,700 around 3:30 p.m. EST. However, it didn't take long for the cryptocurrency to stumble, dropping to around $99,500 within the following hours. Determined to break free, Bitcoin surged once more, reaching nearly $100,900 by 7 p.m. EST. This impressive climb represented a 14% increase since its dip on January 13, 2021.
Several analysts attributed this latest rally to a handful of bullish factors. First on the list were recent inflation reports, with some observers suggesting that their implications for monetary policy could make Federal Reserve officials less hawkish.
The Federal Open Market Committee (FOMC) had previously implemented significant rate hikes, increasing the target range for the benchmark federal funds rate by more than 500 points within a two-year span. This move generated strong upward pressure on borrowing costs, causing concern among investors.
Another potential catalyst for Bitcoin's rally was President-Elect Donald Trump's inauguration. Some analysts predicted that this event would be advantageous for the world's most prominent digital currency.
Brett Sifling, wealth manager for Gerber Kawasaki Wealth & Investment Management, highlighted the CPI report as the driving force behind this price jump. According to the Labor Department, the Consumer Price Index for All Urban Consumers increased at an annualized rate of 0.4% in December 2020.
In their analysis, Greg Magadini, director of derivatives for digital asset data provider Amberdata, pointed to the impact of government reports and the inauguration. They noted that the decline in the monetary environment since December's FOMC meeting and the introduction of less dire inflationary prospects were favorable for Bitcoin.
As Magadini explained, these factors, combined with the bullish sentiment surrounding Trump's inauguration, contributed to the market's optimism, ultimately driving Bitcoin's price back above the $100,000 threshold.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS, and SOL.
Enrichment data highlights several factors that played a role in the Bitcoin price rally and subsequent drops, including initial optimism and liquidity, renewed investor interest, US dollar weakness, regulatory pressures, interest rate hikes, macro economic data, investor sentiment and FOMO, and market volatility and regulatory uncertainty.
The surge in Bitcoin prices on January 15, 2021, beyond $100,000, was driven in part by optimistic analyses of recent inflation reports and President-Elect Trump's inauguration. These factors boosted the sentiment towards cryptocurrencies, leading to an increase in the value of digital assets such as Bitcoin.
With such significant price movements, monitoring the market closely becomes crucial for investors who hold digital currencies like Bitcoin, Bitcoin cash, litecoin, ether, EOS, and SOL, as changes in macroeconomic data and government policies can greatly influence their digital asset portfolios.
