Bitcoin (BTC) Rangebound Between US$91k and US$95k as the Market Awaits the Trump Inauguration

Bitcoin price has been trading in a relatively tight range for the past few days, with limited gains or losses. After kicking off the week with a promising rally, BTC’s momentum seems to have stalled somewhat.

At the time of writing, BTC trades at around US$92,700 (AU$150.6k), up 1.3% in 24 hours but still down 2.7% on the weekly time frame.

Bitcoin’s 24-hour price chart, showing a slight gain. Source: TradingView

Relative to recent highs, BTC has dropped around 11% from the all-time peak of US$103,400 (AU$168.2k) seen on December 1. Still, the world’s largest cryptocurrency is up more than 450% year-to-date (YTD).

Crypto Sell-Off Snowballs as Economic Fears Deepen

As covered by Decrypt, Bitcoin’s price action comes against a backdrop of worsening economic fears, with a sell-off in crypto snowballing on December 15.

The broader crypto market also painted a dull picture on Friday, with most altcoins showing limited price action.

Ethereum (ETH) dropped 8% week-on-week, while Solana (SOL) even dropped 9.8% during the same time. At the time of writing, ETH trades at around US$3,100 (AU$5,040), down 2.3% in 24 hours.

Trump Inauguration Hopes Buoying Bitcoin Ahead of Key Macro Data

With just seven days until Donald Trump is officially moving back into the White House, some analysts are suggesting that we’re starting to see the “pre-Inauguration Day rally” kick off.

Investors are hoping that Trump will mention or otherwise acknowledge crypto on inaugural day, January 20.

In a recent note to investors, Swissblock analysts asked whether this will “turn into a ‘buy the rumor, sell the news’ event, leading to a Bitcoin correction before or during that day?”

Or if a new all-time high is on the cards instead:

Either way, it won’t be an easy couple of days for the OG crypto, because there are substantial macro factors ahead which could influence the path over the short-term.

While BTC appears to be holding up well from a technical perspective, the analysts noted that US inflation data and other macroeconomic factors are still likely to cause some volatility, which could spook investors.

Stagflation Presents Both Opportunity and Risk for Bitcoin

Recent economic data showed robust US job growth, but there are still concerns about persistent inflation, high US debt levels, and the possibility of stagflation.

Stagflation – a combination of high inflation with stagnant growth in the economy – could present both opportunities and challenges for Bitcoin.

Its impact on Bitcoin’s price will likely depend on how investors view Bitcoin (as a safe haven or a risk asset) and how governments and central banks respond to the economic conditions.

More evidence of stagflation:

The ISM manufacturing PMI index rose to 49.3 points in December, but remained in contraction territory.

This marks the 25th month of contraction out of the last 26, the 2nd longest streak on record.

The employment index fell to 45.3 shrinking for… pic.twitter.com/qicFwKGDhW

Analysts at The Kobeissi Letter noted “more evidence of stagflation,” warning:

“Fidelity Digital Assets research director Chris Kuiper adds that ‘continued large and structural fiscal deficits’ make it easy to envision a second wave of inflation.”