In a dynamic turn of events, Bitcoin’s price plummeted to $40,930, marking a significant nearly 4% decrease as of Friday. This downturn comes amid a broader context of financial uncertainty, where the US Dollar is poised for a consecutive weekly rise due to subdued expectations for interest rates. Adding to the complexity of the crypto market, Fidelity’s anticipated Ether ETF faces delays, attributed to a surge in investor demand for more leveraged Bitcoin ETFs.
Compounding these market movements, former President Donald Trump has vehemently criticized Central Bank Digital Currencies (CBDCs) as a “dangerous threat to freedom,” asserting a strong opposition to the creation of digital dollars.
These developments weave a multifaceted narrative of fluctuating digital currency values, regulatory challenges, and political interventions, setting a dramatic stage for the future of cryptocurrencies.
Anticipated Rise in the Dollar Amid Muted Rate Outlook
The US dollar is expected to rise for a second consecutive week, driven by Fed’s cautious approach to rate decreases and indications of the country’s economic resilience. Currencies that are typically more vulnerable to volatility, such as the New Zealand and Australian dollars, experienced their largest weekly increases since November and June, respectively. Markets are now pricing in a 57% chance of a US rate cut in March, down from 75% a week earlier.
Dollar headed for second weekly gain on tempered rates outlook https://t.co/8LGCyyvIW8 pic.twitter.com/eZFxcKoWtY
— CNA (@ChannelNewsAsia) January 19, 2024
In 2024, the dollar index gained approximately 5% against the yen, rising 0.9% to 103.4 over the week. The yen was impacted by Japan’s core inflation slowing to 2.3% in December, leading analysts to revise their expectations for the USD/JPY exchange rate upward.
Strong job market data from the United States and cautious remarks by central bankers globally have dampened expectations of rate cuts, influencing currency movements.
Given these developments, Bitcoin hit a five-week low at $40,936 as investors took profits following the US approval of spot Bitcoin exchange-traded funds, amidst the speculative price surges experienced in 2023.
Fidelity Ether ETF Delay: High Demand for Leveraged Bitcoin ETFs
The consideration time has been extended by 45 days by the U.S. Securities and Exchange Commission (SEC), who has delayed its judgment regarding Fidelity’s Ethereum ETF bid. March 5 is the new decision date. Five leveraged Bitcoin ETFs have filed to get SEC approval at the same time as this delay. ProShares, REX Shares, and Direxion all submitted applications for leveraged Bitcoin-tracking exchange-traded funds (ETFs).
Leveraged Bitcoin ETFs may soon surpass long-only ones, according to Bloomberg ETF expert Eric Balchunas. This is a rare event. Due to differing views of the SEC’s position, the postponement creates doubt over the approval of spot Ether ETFs.
The SEC has delayed its decision on Fidelity’s Ether ETF. Meanwhile, five more leveraged Bitcoin ETF bids have just rolled in, this time from Direxion. https://t.co/eci16nFRPn
— Cointelegraph (@Cointelegraph) January 19, 2024
Some predict a 70% likelihood of approval by May, while others think the SEC is still anti-crypto and would classify Ether as a security, in contrast to Bitcoin’s commodity status. The regulatory environment could influence how much Bitcoin costs.
Donald Trump Condemns CBDC as a Threat to Freedom
In the event that he is re-elected, former US President Donald Trump has promised to thwart the creation of a central bank digital currency (CBDC). According to Trump, a digital currency would give the federal government “absolute control over your money,” endangering people’s freedom as the government could take money without their knowledge.
The declaration is in line with the doubts expressed by other legislators, such as Representative Tom Emmer, the author of the CBDC Anti-Surveillance State Act.
The Federal Reserve is prohibited from using CBDCs for monetary policy or providing direct services to individuals under this law, which currently has 75 co-sponsors. Trump’s position mirrors the current discussion surrounding CBDCs, and the regulatory environment and public opinion regarding digital currencies may have an impact on Bitcoin pricing.
Bitcoin Price Prediction
As of January 19, Bitcoin (BTC/USD) has witnessed a slight decline, trading at $41,138, down by 0.34%. This subtle movement occurs within a 4-hour chart timeframe, indicating a short-term perspective. The pivot point is currently set at $41,496. Resistance levels are observed at $43,252, $44,384, and $45,260, marking potential ceilings for price ascents. Conversely, support levels are found at $40,492, $39,414, and $38,351, which could serve as cushions against further declines.
The Relative Strength Index (RSI) stands at 34, suggesting a trend towards oversold conditions. The Moving Average Convergence Divergence (MACD) and the 50-Day Exponential Moving Average (EMA) at $43,008.00 provide additional layers of analysis, but specific values and observations are not provided.
Bitcoin Price Chart – Source: Tradingview
A notable development is Bitcoin breaking out of its recent sideways trading range between $43,250 and $41,500. This movement signals a potential shift in market dynamics.
The overall trend for BTC/USD appears bearish, particularly if it remains below the $41,500 threshold. This bearish sentiment is supported by the current technical indicators and chart patterns, suggesting that traders and investors should approach with caution and closely monitor resistance levels for any signs of a trend reversal.
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