Despite the US Federal Reserve's decision to pause interest rate cuts, Bitcoin (BTC) is holding firm above $105,000. Key US macroeconomic data releases could introduce volatility. Analysts note similarities between the current bull cycle and the 2015-2018 period, suggesting potential for further growth.
Bitcoin Maintains Strength Above $105,000 Despite Fed Pause
Bitcoin’s price continues to show resilience, trading above $105,000 on Thursday. This follows a modest uptick after Wednesday’s Federal Open Market Committee (FOMC) meeting. As widely anticipated, the US Federal Reserve maintained the federal funds rate within the 4.25%–4.50% range. However, the central bank adopted a slightly more hawkish tone, acknowledging a lack of progress on inflation.
The Fed’s monetary policy statement highlighted the ongoing strength of the labor market while keeping its assessment of dual mandate risks as "balanced." The committee also indicated increased uncertainty regarding future rate cuts due to shifting US policy conditions.
Following the announcement, US Treasury yields climbed, with the 10-year note rising 4.5 basis points to 4.581%. Meanwhile, the US Dollar Index (DXY) advanced 0.17% to an intraday high of 108.10. Although Bitcoin posted a 2.37% gain on Wednesday, the Fed’s pause could imply a longer-term bearish outlook for risk assets like cryptocurrencies.
Investors are now closely watching the US Bureau of Economic Analysis (BEA), which is set to release its initial estimate of the US Gross Domestic Product (GDP) for the October–December quarter.
"The current release is somewhat tricky as the Fed announced its monetary policy decision to hold rates steady ahead of the GDP and PCE updates, and financial markets are still digesting the latest news," noted the FXStreet team.
A stronger-than-expected GDP reading could reinforce the Fed’s hawkish stance and bolster the US dollar, potentially pressuring risk assets like Bitcoin. Conversely, disappointing data could weaken the dollar and provide tailwinds for crypto markets.
Current Bitcoin Bull Cycle Mirrors 2015-2018 Patterns
A recent "Forward Thinking" report from Glassnode highlights several structural similarities between the current Bitcoin bull market and the 2015-2018 cycle.
The report suggests Bitcoin’s advance reflects a maturing market, characterized by reduced cyclical growth, moderate bull market corrections, and a more measured expansion in realized capitalization.
Although below previous cycle peaks, the current cycle’s 2.1x growth in realized capitalization—compared to the previous cycle’s 5.7x peak—aligns closely with the 2015-2018 period at a similar stage. This suggests potential room for further, sentiment-driven expansion in the long term.
The report also addresses a widely discussed topic: the decline in exchange balances. It notes that this trend does not necessarily indicate a dramatic supply reduction when considering the migration of supply to ETF custody wallets. Therefore, the concept of an imminent supply shock due to falling exchange balances may be overstated.
Data indicates Bitcoin balances on centralized exchanges have fallen to 2.7 million BTC, down from 3.1 million BTC in July 2024. While many interpret this as a supply shock caused by massive investor withdrawals—which could create upward price pressure—the report explains this decline is largely due to coins being reallocated to exchange-traded fund (ETF) wallets managed by custodians like Coinbase.
Instead, the primary driver of the market cycle remains the rotation of capital from long-term holders to new investors. Following two distinct distribution waves, the scale and speed of wealth transfer in the current cycle resemble those seen during the late-2017 and early-2021 bull markets. This suggests the market may be approaching a phase of short-term demand exhaustion, which could lead to a renewed period of dominant HODLing behavior. To track these market cycles in real-time, you can explore more advanced on-chain analysis tools.
Bitcoin Price Prediction: BTC Targets New Highs
Bitcoin price found strong support near the 50-day Exponential Moving Average (EMA) at $98,633 on Monday. It then rallied 2.37% on Wednesday, closing above $103,700. As of Thursday, it continues to trade around $105,400.
If the recovery continues, BTC could potentially retest its all-time high of $109,588, set on January 20.
The Relative Strength Index (RSI) on the daily chart reads 60, having rebounded above the neutral 50 level on Tuesday. This indicates a rise in bullish momentum. Additionally, the Moving Average Convergence Divergence (MACD) indicator is showing signs of convergence. A bullish crossover on the daily MACD would provide a strong buy signal and confirm the upward trend.
However, if BTC fails to hold above $100,000 and records a daily close below the 50-day EMA, it could extend its decline toward the next key support level near $90,000. For those looking to understand these technical indicators better, view real-time charting tools.
Frequently Asked Questions
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization. It is a decentralized digital currency designed to function as a form of money, enabling peer-to-peer financial transactions without the need for a central authority or intermediary.
What are altcoins?
Altcoins refer to any cryptocurrency other than Bitcoin. Some analysts also exclude Ethereum from this category due to its foundational role. Litecoin is often considered the first altcoin, as it was a fork of the Bitcoin protocol intended to be an "improved" version.
What are stablecoins?
Stablecoins are a type of cryptocurrency designed to maintain a stable value, typically pegged to a reserve asset like the US dollar. Their supply is regulated by algorithms or demand, and their primary purpose is to provide an on-ramp for investors entering the crypto market and a stable store of value amid volatility.
What is Bitcoin dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies. It is a key metric for gauging investor sentiment. High dominance often occurs before and during early bull markets as investors flock to Bitcoin's relative stability. A decline typically signals that investors are rotating capital into altcoins seeking higher returns.
What drives Bitcoin's price?
Bitcoin's price is influenced by a combination of factors, including supply and demand dynamics, macroeconomic conditions, regulatory news, institutional adoption, and broader market sentiment within the cryptocurrency space.
How can I analyze Bitcoin's price trends?
Common methods include technical analysis (using charts and indicators like RSI and MACD), on-chain analysis (examining blockchain data like exchange flows), and fundamental analysis (assessing network adoption and macroeconomic factors).