BTCUSD – Daily Chart
The line on the chart connects to the two previous all-time highs and is a pivotal line for the path ahead.
Crypto-tracking futures betting on higher prices saw a liquidation of $560 million as buyers ran away. Inflation was a boogeyman once again after the Institute for Supply Management (ISM) report on the US service economy was stronger than anticipated. The price paid measure was at its highest level since 2023. We then had the Federal Reserve talking of higher inflation ahead and blaming the Trump administration’s policies. That is a blow for crypto traders as hopes for crypto-friendly efforts may be negated by the inflationary threat.
US job openings were also higher which shows strength in the employment market and allows the Fed to remain in a hawkish stance with interest rates.
Stocks were also lower after the data but were helped by dovish comments from Fed Governor Waller who said, “The extent of further easing will depend on what the data tell us about progress toward 2% inflation, but my bottom-line message is that I believe more cuts will be appropriate”.
X user Trader Skew also noted $95,000 as the key short-term level for BTC at the moment.
“Around 1 day chart lows ($92K – 88K), bid liquidity has been buffered up a decent amount with increased demand,” he wrote. A move into those levels would break the long-term support line and put BTC in a pressure situation ahead of Trump’s inauguration.
He also has a sentencing to deal with a hush-money case and traders should use caution on BTC longs as that develops on the 10th of January.
Despite some weakness, Fidelity asset management believes that demand will increase for Bitcoin in 2025 from institutional buyers.
“We anticipate more nation-states, central banks, sovereign wealth funds, and government treasuries will look to establish strategic positions in bitcoin,” analyst Matt Hogan wrote. A lot may depend on Trump and whether the strategic reserve fund comes to fruition.
If the US were to set up a Bitcoin fund then other countries may try to keep up and lead to a rush for the coin in 2025. For now, traders should keep an eye on the $94-95k level as short-term support.