As the U.S. presidential inauguration approaches, Bitcoin (BTC) traders are bracing for a volatile week shaped by macroeconomic pressures, technical levels, and shifting market sentiment. With the dollar reaching its strongest point since late 2022—a period marked by deep crypto bearishness—the stage is set for pivotal movements in BTC pricing and investor behavior.
This article explores five critical developments influencing Bitcoin this week: key technical price zones, inflation data impacting Federal Reserve policy, the surging U.S. dollar, weakening sell-side pressure on Binance, and growing hodling behavior among traders.
Bitcoin Faces Risk of Breaking Below $90,000
At the start of the week, Bitcoin remains within a tight trading range, but major price triggers loom on the horizon. After briefly spiking toward $96,000, BTC/USD has settled back around $93,000, according to data from Cointelegraph Markets Pro and TradingView.
Technical analysts are closely watching two critical levels that could determine the next directional move:
- $91,000: A potential sweep of the range low
- $96,300–$97,000: A key liquidation zone where long positions may be cleared
Popular trader CrypNuevo highlighted these levels in an X post, noting that $96,600 stands out as a primary clearance point based on Binance’s order book structure. These areas represent concentrations of stop-loss orders and leverage positions that automated systems often target during volatility.
“After a breakout, retesting the middle of the range to confirm support or resistance is common before continuation,” CrypNuevo explained.
This pattern suggests that even if Bitcoin breaks above or below its current channel, a pullback to test the $93,000–$94,000 zone is likely before any sustained momentum builds.
Meanwhile, Daan Crypto Trades emphasized caution until BTC clears $104,700, calling it a structural barrier. Cold Blood Shiller echoed this bearish caution, stating:
“From a technical standpoint, this level is likely to break down, opening up downside space. Everyone wants $85,000—it might be about scaring buyers into panic entries.”
Multiple forecasts suggest Bitcoin could retest levels below $90,000 in January, especially if macro headwinds intensify.
👉 Discover how market sentiment shifts can signal major Bitcoin moves before they happen.
CPI Data Kicks Off Crucial Week for Fed Policy
This week is pivotal for inflation trends and Federal Reserve decision-making—factors that directly impact risk assets like Bitcoin.
Key economic releases include:
- December 2024 Consumer Price Index (CPI)
- Producer Price Index (PPI)
- Weekly jobless claims
With both inflation and unemployment rising, the Fed will scrutinize these figures ahead of its January 29 rate decision. Market expectations have shifted dramatically: just a month ago, rate cuts seemed imminent. Now, hawkish rhetoric has returned.
The phrase “higher for longer” is back in vogue.
According to the CME Group’s FedWatch Tool, the probability of a 25-basis-point rate cut in January is only 2.7%. This shift reflects growing concern over persistent inflation, reducing liquidity flow into speculative markets—including cryptocurrencies.
As The Kobeissi Letter noted:
“This is a huge week for inflation data and the Fed. The last prints before the FOMC meeting will set the tone.”
Lower liquidity typically translates to reduced buying pressure in crypto markets, contributing to consolidation or pullbacks. Traders are now pricing in fewer rate cuts throughout 2025, increasing borrowing costs and making non-yielding assets like Bitcoin less attractive in the short term.
Strong Dollar Approaches Fed “Reaction Zone”
One of the most significant macro headwinds facing Bitcoin is the rapid strengthening of the U.S. dollar.
The DXY index, which measures the dollar against a basket of major currencies, has climbed to its highest level since late 2022—coinciding with Donald Trump’s upcoming January 20 inauguration. While political transitions don’t directly cause market moves, increased uncertainty often boosts demand for safe-haven assets like the U.S. dollar.
Historically, a strong dollar correlates with weaker performance in risk-on assets, including cryptocurrencies.
Notably:
- The last time DXY was this high, Bitcoin was bottoming out during the 2022 bear market.
- Trader Tony “The Bull” Severino reports that the correlation between DXY and BTC is now at its strongest since 2016.
The Trading Initiative observed:
“Risk assets may continue to struggle until the dollar weakens. Historically, readings above 110 trigger a Fed response as conditions begin to break.”
Their analysis points to 110.86 as a potential target level where intervention or policy shifts might occur. Until then, a strong dollar remains a structural headwind for Bitcoin and broader crypto markets.
👉 See how global macro trends influence cryptocurrency valuations in real time.
Signs Show Bitcoin Sellers Are Losing Power
Despite macro challenges, on-chain data reveals a positive shift in market dynamics.
CryptoQuant’s Binance Buy/Sell Ratio—a metric comparing buy-side volume to sell-side volume—shows early signs that selling pressure is waning. Although monthly change remains slightly negative at -5%, the weekly trend is turning upward.
Crazzyblockk, a contributor to CryptoQuant’s Quicktake series, noted:
“The rising buy/sell ratio indicates weakening seller dominance and increasing buyer demand.”
This is significant because:
- It marks the first time since March that the 30-day rolling average has shown diminishing sell-side control.
- Binance’s dominant position in global crypto trading makes this metric highly representative of broader market sentiment.
A rising buy/sell ratio often precedes bullish reversals, suggesting accumulation may be underway even during sideways price action.
YouTube analyst Kyle Doops captured growing optimism:
“Could this be the beginning of a broader price move?”
Binance Users Opt to HODL Amid Declining Inflows
Another bullish signal comes from declining BTC inflows into Binance exchange wallets.
Data shows daily BTC inflows averaging around 6,000 BTC, down approximately 75% from November peaks. This sharp decline suggests traders are less inclined to sell or trade their holdings—opting instead to hold long-term.
Darkfost, another CryptoQuant analyst, summarized:
“Reduced inflows indicate easing sell pressure. Investors appear more confident holding BTC than offloading it.”
Additionally:
- Net outflows still dominate
- Recent days show stable net inflows, signaling balanced market conditions
This behavior reflects growing confidence that current prices—despite volatility—represent value rather than a peak.
“If this trend continues, we could see extended consolidation or renewed bullish momentum,” Darkfost added.
The shift toward hodling over trading reduces circulating supply available for sale, potentially fueling future price increases when demand rises.
Frequently Asked Questions (FAQ)
Q: Why is the strong U.S. dollar bad for Bitcoin?
A: A stronger dollar increases the cost of risk assets denominated in USD. It also reflects tighter monetary policy and higher yields, making non-interest-bearing assets like Bitcoin less attractive to investors.
Q: What does the Binance Buy/Sell Ratio tell us?
A: This metric compares buying volume versus selling volume on Binance. A rising ratio suggests growing demand and weakening selling pressure—often a precursor to price increases.
Q: Could Bitcoin drop below $90,000?
A: Yes—technical analysis shows strong liquidation zones near $91K and $96K. If bearish momentum builds and macro conditions worsen, a retest of $85K–$88K is possible.
Q: How do CPI and PPI affect cryptocurrency markets?
A: High inflation readings delay Fed rate cuts, keeping interest rates elevated. This reduces liquidity and investor appetite for speculative assets like crypto.
Q: Is low exchange inflow bullish for Bitcoin?
A: Yes—when fewer coins flow into exchanges, it means holders are less likely to sell. This tightens supply and increases scarcity, supporting upward price pressure over time.
Q: What happens after the U.S. presidential inauguration?
A: Post-inauguration markets often experience recalibration. Policy expectations related to regulation, spending, and monetary independence can influence investor sentiment across asset classes.
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