Bitcoin Rebounds as Traders Look to Trump’s Inauguration and Economic Data for Clues on Market Direction
The selloff in both stocks and cryptocurrencies has led K33 Research to reconsider its initial expectation that Donald Trump’s inauguration could be a classic “sell the news” event. Instead, the firm suggests that the current market dynamics may make such an event less likely.
Bitcoin (BTC) bounced back from Monday’s sharp selloff, climbing to as high as $97,300 on Tuesday, as traders focused on U.S. inflation data and anticipated more reports to be released in the coming days. The dip below $90,000 was swiftly bought up, spurred by news that President-elect Trump is preparing a series of executive orders benefiting the crypto industry. The rally continued, bolstered by softer-than-expected Producer Price Index (PPI) data for December.
As of now, BTC is trading at around $96,500, marking a 3% increase over the past 24 hours. The broader CoinDesk 20 Index outperformed with a 5% gain, while XRP and Dogecoin (DOGE) led the altcoin pack with advances of 6%-7%.
Meanwhile, traditional markets saw a more subdued response. The Nasdaq and S&P 500 closed mostly flat, reflecting investor uncertainty amid volatile conditions.
Looking at the broader picture, bitcoin continues to consolidate above $90,000, even as rising bond yields and a stronger U.S. dollar have caused global market turbulence in recent weeks. Traders have begun to scale back their expectations for U.S. interest rate cuts this year, particularly after a series of strong economic data releases.
The Consumer Price Index (CPI) report due on Wednesday could introduce further volatility, providing traders with more insight into the Federal Reserve’s likely policy path for 2025.
Turning to Trump’s inauguration on January 20, market participants are keeping an eye on the potential pro-crypto policies the incoming president may introduce. K33 Research had initially projected the inauguration could trigger a sell-the-news event, but after the early-year sell-off, the firm has revised its outlook.
“While our monthly outlook initially favored selling during the inauguration, we now believe that selling BTC at that time is less appealing unless the next week brings a significant resurgence of momentum,” the report stated. “With the S&P 500 having closed its post-election gap and BTC reaching 2-month lows, de-risking strategies will be highly dependent on price action in the coming days.”
Despite this short-term uncertainty, K33 Research maintains a bullish long-term outlook on Bitcoin and expects Trump’s impact to positively influence the cryptocurrency market over time.
