The cryptocurrency market has experienced an upswing as optimism grows regarding a potentially crypto-friendly regulatory landscape ahead of U.S. President-elect Donald Trump’s upcoming inauguration. As of January 6, the total market capitalization of cryptocurrencies climbed by 1.04% over the past 24 hours, reaching $3.53 trillion, two weeks before Trump is set to assume office. Additionally, overall trading volume saw a 5.8% increase, amounting to $92.7 billion, underscoring a rising demand for cryptocurrencies.
Bitcoin, the largest digital currency by market capitalization, has inched closer to $100,000, trading at $99,533, up 1.1% in the last 24 hours. This value remains 8% below its all-time high of $108,268, achieved on December 17. Ether, the second-largest cryptocurrency, also saw gains, rising approximately 1% to $3,673.
There is increasing speculation that Trump’s administration will introduce regulatory changes favorable to the crypto industry. Brad Garlinghouse, CEO of Ripple, noted that 75% of Ripple’s current job openings are now based in the U.S., attributing this strategic shift to the anticipated pro-crypto stance of the incoming administration.
Moreover, Hive Digital announced plans to relocate its headquarters from Vancouver, Canada, to San Antonio, Texas, citing support from the new administration’s positive outlook on Bitcoin. Cathie Wood, founder of ARK Invest, expressed confidence in potential deregulation fostering a business-friendly environment for cryptocurrency ventures. She also reaffirmed her projection that Bitcoin could reach a price of $1 million by 2030, amid heightened merger and acquisition activity in the coming years.
Favorable macroeconomic conditions, including easing inflation, which enhances the appeal of riskier assets such as cryptocurrencies, coupled with general economic optimism, may continue to drive the crypto market’s growth. Markus Thielen, founder of 10x Research, predicted that a positive Consumer Price Index (CPI) report on January 15 could bolster the current rally leading up to Trump’s inauguration. However, Thielen warned that momentum might slow as the Federal Open Market Committee’s meeting approaches on January 29.
Currently, market participants are anticipating an 88.8% likelihood that the U.S. Federal Reserve will maintain its benchmark interest rate between 4.25% and 4.5% during the forthcoming FOMC meeting. The Fed’s preferred inflation measure, the core Personal Consumption Expenditures (PCE) price index, is also due for release by the end of January.
From a technical analysis perspective, the total crypto market cap is forming a bullish pattern, suggesting a continued upward trend. After peaking at $3.7 trillion on December 17 before dropping to $2.05 trillion, the market has rebounded to $3.44 trillion, creating the conditions for a possible bull flag. Should the total market cap surpass the resistance level at $3.58 trillion, a breakout could pave the way for growth toward the $4 trillion mark and potentially as high as $6.06 trillion, representing a 76% increase from its current value.
This analysis does not constitute financial advice, and individuals are encouraged to conduct their own research before making investment decisions.
