Key Points
- Bitcoin’s price fell to $90,000 on January 13 due to continued weakness in the cryptocurrency market.
- Expected US inflation data and Donald Trump’s inauguration could impact Bitcoin’s price.
The price of Bitcoin dropped to $90,000 on January 13 as the cryptocurrency market’s recent decline persisted.
Bitcoin’s price fell 16% from its December high and is now near its lowest point since November 19. Other cryptocurrencies like Solana and Cardano also experienced a downturn.
Reasons for the Crypto Crash
The continued crypto crash is primarily due to increasing expectations that the Federal Reserve will take a more hawkish approach this year. These expectations were fueled by robust nonfarm payroll data published by the U.S. on Friday.
The data revealed a decrease in the unemployment rate to 4.1% in December, with over 256,000 jobs added to the economy. This led to a drop in stock prices and a rise in government bond yields.
Potential Catalysts for Bitcoin Recovery
One possible catalyst for a Bitcoin rebound is the forthcoming U.S. consumer inflation data, set to be released on Wednesday. Economists predict that the data will show inflation increased from 2.7% in November to 2.9% in December, with core inflation expected to remain at 3.3%.
If inflation figures are lower than expected, Bitcoin and other cryptocurrencies may see a recovery. For example, if the headline and core Consumer Price Index drop to 2.5% and 3.0%, respectively, this could trigger a rise in crypto prices.
Another significant factor is the upcoming inauguration of Donald Trump, which could influence the crypto market. Trump has made steps towards his goal of making the U.S. the global crypto capital, including appointing Paul Atkins as the next Securities and Exchange Commission chief and forming a crypto panel of experts.
His upcoming inauguration and Gary Gensler’s resignation may lead to hype in the crypto industry. This is happening while companies like MicroStrategy and Semler Scientific continue to purchase Bitcoin.
Bitcoin Price Technicals
Another potential catalyst for Bitcoin’s price is its technical setup. Bitcoin is holding at a key support level of $90,100, a point it has not breached since December, indicating that bears are reluctant to place short positions below this level.
Additionally, the accumulation and distribution indicator has been increasing, signaling ongoing accumulation.
While the $90,100 support level forms the neckline of a bearish head-and-shoulders pattern, Bitcoin is likely to bounce back this week. Historical data also shows that Bitcoin tends to rebound after falling on a Monday.
