Bitcoin struggles to overcome the 100,000 barrier

Bitcoin traded sideways on Thursday, failing to overcome the key $100,000 barrier. If BTC price declines, support can be found at $88,890, while resistance may be encountered at $102,600. 

Ethereum price dipped on Thursday, dropping from $3,420 to $3,290. If Ethereum price declines, it may encounter support near $2,900, while if it increases, resistance may be encountered near $3,500.

Bitcoin gained strength on Wednesday as soft US inflation data bolstered expectations of Fed rate cuts this year, boosting risk assets and driving Bitcoin price close to the key $100,000 level. Bitcoin price went briefly above the $100,000 mark on Thursday but struggled to overcome this barrier. 

Bitcoin price registered a new all-time high of $108,200 in December after US President-elect Donald Trump confirmed plans to build a Bitcoin strategic reserve. Donald Trump has openly declared his support of crypto markets, announcing that he will make the US ‘the crypto capital of the planet’. Growing expectations that the new government will adopt a pro-crypto regulatory and fiscal policy have been boosting crypto markets, especially since Donald Trump reaffirmed his pre-election commitment to build a Bitcoin strategic reserve. 

The uncertainty surrounding US President-elect Donald Trump’s trade tariffs, however, is causing a risk aversion sentiment driving high-risk assets down. Last week, conflicting reports on US President-elect Donald Trump’s future economic measures caused turmoil in markets. The uncertainty surrounding Trump’s proposed tariffs put pressure on Crypto markets, as Trump’s risky economic plans lowered the appeal of high-risk assets such as cryptocurrencies. Trump will take office next week on January 20 and concerns that his proposed tariffs could ignite trade wars have triggered a risk aversion sentiment, putting pressure on crypto markets. 

Cryptocurrency prices are also affected by central banks’ interest rates. The US Federal Reserve cut interest rates by 25 basis points at its latest meeting to a target range of 4.25% to 4.50%.  Indications that the Fed will follow a more hawkish approach than previously anticipated are putting pressure on crypto markets. Fed Chair Jerome Powell’s stance has been more hawkish lately, emphasizing the need to be cautious about further rate cuts.

BTC/USD 1h Chart

ETH/USD 1h Chart

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Written by:
Myrsini Giannouli

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