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Bitcoin's rebound from $100,000 signals building momentum toward previous all-time high levels.
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The Fed’s stance and Trump’s tariff policies will drive Bitcoin’s next moves.
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With support at $102,000–$103,500, Bitcoin’s outlook suggests further upside if it holds these levels.
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After dropping briefly below the $100,000 mark at the beginning of the week, Bitcoin staged a swift rebound back above that level.
The crypto’s resilience shone through as it regained ground, hovering around the $101,000 mark by midweek. The Fed’s latest take on cryptos helped fuel the positive momentum, pushing Bitcoin toward $106,000.
From a technical standpoint, Bitcoin’s ability to remain within the second segment of its ascending channel, which began in September, is a positive sign—indicating that there’s still room for growth if momentum can be sustained.
Buyers Stepped in to Capitalize on Early-Week Dip
The early drop in Bitcoin’s price can be attributed to several factors, including the launch of DeepSeek, which put downward pressure on tech stocks and spilled over into the crypto market. Yet, buyers swiftly took advantage of Bitcoin’s dip below $100,000, pushing it back toward the $101,000 zone.
The Federal Reserve’s decision to leave interest rates unchanged had little impact on the cryptocurrency markets, as the move had already been priced in. However, the Fed’s Chair, Jerome Powell, made waves with his comment that banks could hold Bitcoin, provided risks were properly managed—a comment that was warmly received by the market. Additionally, the European Central Bank (ECB) added to the positive sentiment with its rate cut, although ECB President Christine Lagarde’s comments rejecting Bitcoin as a reserve asset did slightly dampen enthusiasm.
On a global scale, geopolitical factors—like former U.S. President Donald Trump’s tariff policies—are also beginning to pose risks for Bitcoin. As the cryptocurrency becomes more integrated into the global financial system, any uncertainty around tariffs could weigh on risk appetite. However, with tariff details set to be clarified in February, market participants might adjust their positions, which could fuel increased volatility for Bitcoin.
Despite these concerns, investor appetite for Bitcoin remains intact, as evidenced by the recent influx of funds into Bitcoin ETFs, signaling continued optimism in the market.
The Fed Will Remain the Key Driver for Bitcoin
Looking ahead, the Federal Reserve’s policy decisions are likely to continue driving Bitcoin’s market trajectory. Historically, the Fed’s stance on interest rates has influenced Bitcoin’s broader direction, and this trend is expected to persist.
As the Fed signals a cautious approach to rate cuts, political pressure from Trump could add another layer of complexity to market sentiment. The outcome of this tension will be crucial, with inflation data becoming a key focus. If inflation readings soften, the central bank might adopt a more dovish stance, which could help Bitcoin. On the other hand, high interest rates would continue to make the dollar attractive, pressuring Bitcoin.
If the Trump-Fed conflict escalates, it could trigger volatility across risk assets, including Bitcoin.
Bitcoin’s Technical Outlook: A Crucial Support Zone
Bitcoin’s technical outlook remains cautiously optimistic. The cryptocurrency is still holding above the $104,000 threshold at the close of the week. The key support zone lies between $102,000 and $103,500. If this level holds, Bitcoin could make another attempt at reaching the upper boundary of its ascending channel.
Looking at the daily chart, the Stochastic RSI is turning higher from the oversold region, signaling potential for continued upward movement. A strong rally could take Bitcoin to test the $108,000 level, with the possibility of pushing toward $112,000. However, if Bitcoin closes below $102,000, the recovery momentum will weaken, and a drop to the $99,000 region could follow. A failure to hold that level would open the door for further declines.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.