Crypto Surge Sparks Speculation: Is a Trump-Era Bitcoin Boom on the Horizon?

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The cryptocurrency market has witnessed an upswing owing to positive Consumer Price Index (CPI) data and a favorable outlook for crypto regulations under the administration of President-elect Donald Trump. Consolidating at $3.5 trillion on January 6, the global crypto market cap saw a 3.2% rise over 24 hours. Bitcoin spearheaded this resurgence, drawing closer to the significant $100,000 milestone. Among the top performers were XRP, Solana, and Dogecoin, with notable gains of 7.7%, 7.2%, and 4.5%, respectively.

The relief in the market traces back to the December CPI report released on January 15. The CPI increased by 0.4% in December, slightly more than the projected 0.3%, with a year-over-year rise of 2.9%. Meanwhile, the core CPI, excluding food and energy, reflected a 0.2% growth, aligning with forecasts. These figures signal persisting inflationary pressure beyond the Federal Reserve’s 2% target, prompting speculation that interest rates will remain steady at the upcoming January 29 meeting. Futures markets have adjusted expectations accordingly, now with a 97.3% probability of unchanged rates.


Adding to the market revival, a wave of short liquidations across the cryptocurrency derivatives market contributed to the rising prices. Over $347 million in positions have been liquidated within the last day, predominantly involving short positions. The sudden liquidation of over 110,000 traders underscores the impact, the largest being a $12.61 million ETH/BTC order on Binance.

This optimistic trend aligns with anticipation for the incoming Trump administration, which is expected to encourage a crypto-positive regulatory environment. Such speculation has fueled expectations of a strategic U.S. Bitcoin reserve, more particularly as Trump’s inauguration approaches on January 20.

The market’s rebound has seen TOTAL, representing all cryptocurrency capitalizations, reclaim support at the 50-day simple moving average of $3.37 trillion, setting a stage for potential further gains. However, persistent sell pressure could challenge this support, possibly driving the market cap below the 50-day SMA, targeting $3.15 trillion as its next major support level.