# Bitcoin Rally Faces Potential Roadblocks Ahead of Federal Reserve Rate Decision

The anticipated Bitcoin rally around former President Donald Trump’s inauguration on January 20 could face a slowdown as the Federal Reserve’s upcoming interest rate decision looms at the end of the month. Marcus Thielen, founder of 10x Research, has highlighted the Fed’s rate decision as a major risk factor for Bitcoin’s upward trend.

In a report released on January 5, Thielen predicted a positive trajectory for Bitcoin in early January, with a minor adjustment expected ahead of the Consumer Price Index (CPI) release on January 15. He stated, “If the CPI data comes out positive, optimism could reignite, leading to a rally ahead of Trump’s inauguration.”

However, Thielen warned that market momentum might weaken ahead of the Federal Open Market Committee (FOMC) meeting on January 29. According to CME Group’s FedWatch tool, there is an 88.8% probability that the meeting will result in maintaining the current interest rates at 4.25-4.50%.

# Interest Rate Announcements and Bitcoin Price Forecast, Monetary Policy Stance as Major Risk Factors for 2025

Thielen stressed that communication from the Federal Reserve regarding its monetary policy will be a significant risk for Bitcoin rallies going into 2025. He noted, “Although inflation is expected to decrease this year, it will take time for the Federal Reserve to recognize and respond to this change.”

Thielen projected that Bitcoin’s price would hover between $97,000 and $98,000 by the end of January. He also identified the issuance of stablecoins and the inflow into Bitcoin spot ETFs as critical factors determining the speed at which institutional investors return to the market.

John Glover, Chief Investment Officer at cryptocurrency lending firm Ledn, forecasted that Bitcoin might experience a pullback to $89,000 in the short term before surging to $125,000 by the end of the first quarter. He suggested that while a subsequent correction to the $100,000 level is possible, Bitcoin could reach $160,000 by the end of 2025 or early 2026, a more conservative estimate compared to asset management firms VanEck and Bitwise, which projected a range of $180,000 to $200,000.

# Market Volatility Ahead of January FOMC, Heightened Investor Sentiment and Attention

Bitcoin and the broader cryptocurrency market’s investment sentiment, as measured by the Fear & Greed Index, returned to the “Extreme Greed” level on January 5, scoring 76 out of 100 points. This shift followed Bitcoin’s rise to $98,850. The index had fallen to the “Greed” zone on December 27, 2024, and stayed at that level for ten days.

Experts view the upcoming January CPI and FOMC results as pivotal factors that will dictate the market’s near-term direction. Investors are keenly watching for any potential changes in the Federal Reserve’s interest rate policies and the subsequent reactions in the Bitcoin market.