Markus Thielen, founder of 10x Research, has identified the Federal Reserve’s monetary policy decisions as being key factors impacting Bitcoin’s performance in early 2025. According to Thielen, such decisions could slow its momentum ahead of the FOMC meeting on January 29.
Bitcoin’s January Rally: Key Predictions
Thielen predicts a promising start to January 5, with Bitcoin rallying ahead of Donald Trump’s January 20 inauguration. But he warns that its momentum could wane later as markets adjust to major events like the release of Consumer Price Index inflation data on January 15.
Thielen noted that an upbeat inflation print could renew market optimism and help propel Bitcoin prices upward leading up to President-elect Trump’s inauguration; however, an FOMC meeting could trigger a temporary retreat as investors respond to Federal Reserve interest rate stance.
Read also: Bitcoin’s Promising Future in 2025: Insights from Economist Alex Krüger
FOMC Has A Wide Reach
CME Group’s FedWatch tool currently projects an 88.8% likelihood that the Federal Reserve will maintain its target rate between 4.25% and 4.5% at its January meeting, which could significantly impact Bitcoin’s trajectory – as evidenced by December 2024 when Bitcoin dropped over 15% to $92,800 after it reduced 2025 rate cut projections by cutting.
Thielen identified the Federal Reserve’s language as an immediate risk to Bitcoin’s price fluctuations as it adjusts for a potential decline in inflation during 2025.
“Thielen noted that inflation should continue its gradual decrease this year; however, the Federal Reserve may take time to recognize and act upon this trend.”
Institutional Flow and Price Forecasts.
Thielen also pointed to institutional investors’ return as being an important indicator of Bitcoin’s performance, noting how stablecoin issuance and inflows into spot Bitcoin ETFs will serve as indicators of institutional interest over the coming months.
Thielen anticipates that Bitcoin will reach stability between $97,000 to $98,000 by the end of January.
John Glover, Chief Investment Officer of crypto lending firm Ledn, expects Bitcoin to experience a pullback to $89,000 before continuing its upward momentum. Glover projects it could reach $125,000 before experiencing another pullback to $100,000 before reaching that point again later or early 2026; his long-term forecast suggests it might hit that figure more conservatively than VanEck and Bitwise predictions of $180,000-200k.
Sentiment Remains Bullish Amid Volatility
Though fears over short-term dips remain, market sentiment remains bullish. On January 5, Bitcoin reached $98,850 and sent the Crypto Fear and Greed Index back into “Extreme Greed” territory with a score of 76 out of 100.
This represents an improvement since late December 2024 when the index temporarily left “Extreme Greed” territory and spent 10 consecutive days within “Greed” territory.
Bitcoin’s performance in 2025 will depend on an intricate balance between macroeconomic factors and market sentiment. Trump-led rallies may provide short-term boosts, but FOMC meetings and wider economic signals will ultimately determine Bitcoin’s destiny in the coming months.
