Will BTC continue its wild run or take a break from adjustment? BlackRock CEO: Maybe up to 700,000

Author: BitpushNews

After hitting an all-time high of $109,225 on Donald Trump's inauguration day, Bitcoin prices retreated slightly to $103,576.49 on Wednesday afternoon, down 2.2% in 24 hours and still up 9% so far this month.

At the same time, BlackRock CEO Larry Fink expressed an optimistic outlook on digital currencies, especially Bitcoin, at the World Economic Forum in Davos.

Fink said demand for Bitcoin as a safe-haven asset has been rising as investor concerns about currency devaluation and political and economic instability intensify. He even boldly predicted that if more institutional investors invest 2% to 5% of their asset allocation in Bitcoin, the price of Bitcoin is expected to reach $700,000.

He said: “I was speaking to a sovereign wealth fund this week and the discussion was, ‘Should we allocate 2% or 5%?’ If everyone adopted that view, the price per Bitcoin would be $500,000, $600,000, even $700,000.”

"So I'm a big believer in it as a tool," said Larry Fink, adding that he wasn't trying to promote Bitcoin.

Inflation concerns remain

Although the annual U.S. Consumer Price Index (CPI) rose 3.2% year-on-year in 2024, slightly lower than the 3.3% expected, some investors and analysts believe that CPI based on a basket of common household items does not accurately reflect true inflation Rate.

A shareholder proposal submitted to Meta in January this year called for the company to use Bitcoin as a reserve asset, arguing that the true inflation rate may be twice as high as the published CPI data.

The National Center for Public Policy Research, a free-market think tank, submitted the same shareholder proposal to Amazon in December, citing the same reasons.

The think tank said the average CPI inflation rate over the past four years was about 4.95% and peaked at 9.1% in June 2022. "In reality, the true rate of inflation is much higher, with some studies estimating that it is sometimes close to twice the CPI. Therefore, a company's assets need to appreciate at these rates to maintain breakeven."

Larry Fink also sounded the alarm on inflation, saying he was concerned that inflation could rise over the next 12 months and warned that it was dangerous to think that inflation levels had peaked.

Generally speaking, if the dollar strengthens further and interest rates continue to rise, it will create headwinds for most risk assets, including Bitcoin.

Where will Bitcoin go next?

Martin Leinweber, director of digital asset research and strategy at index provider MarketVector Indexes, said in an interview with MarketWatch that although Bitcoin hit a new high above $109,000, it spent most of its time consolidating between $92,000 and $106,000. The crypto market is waiting for the next catalyst, whether it’s an announcement about a U.S. strategic Bitcoin reserve or the impending approval of certain altcoin ETFs.

So far, U.S. regulators have only approved Bitcoin and Ethereum ETFs. Several asset managers have submitted applications to invest in Solana, XRP, Dogecoin and even Trump ETFs, and 21Shares crypto research strategist Matt Mena said the SEC’s new crypto working group is expected to accelerate the approval of such ETFs.

Mena commented: “A more structured and regulated approval pathway for crypto ETFs could unlock new capital inflows from institutional and retail investors who have long lacked familiar, regulated investment vehicles to invest in these assets. "

Trump repeatedly vowed during the campaign to establish a strategic Bitcoin reserve in the United States, and Joe McCann, CEO of crypto investment firm Asymmetric, noted in a recent interview that while the president has not yet detailed any specific plans for the reserve, one possibility It is the United States that stops selling Bitcoin seized from illegal activities, which will ease the market selling panic.

Leinweber noted that from a technical perspective, Bitcoin’s next target is between $118,000 and $120,000.

Fairlead Strategies founder Katie Stockton recently conducted an in-depth analysis of the Bitcoin market. She pointed out that although Bitcoin's performance has improved in the short term, multiple technical indicators show that the market has entered an overbought state. Stockton emphasized: “Unless Bitcoin can strongly break through the key resistance level of $108,300, we recommend that investors wait and see for the time being and avoid blindly accumulating holdings.” She explained that a “decisive breakthrough” means that Bitcoin prices need to have strong momentum. A breakout of this level rather than a brief hit and then a pullback.

Despite potential market volatility in the short term, Stockton remains optimistic about Bitcoin’s long-term prospects. "Our monthly technical indicators show that Bitcoin remains in a long-term bullish cycle. Therefore, we believe that the current period of consolidation is simply preparation for a larger rally in the future," she said.

Crypto trader Krillin hinted on the X platform that Bitcoin prices may trade sideways between $100,000 and $110,000 ahead of the Federal Open Market Committee (FOMC) meeting on January 28-29. "Unless something unexpected happens, such as the Bank of Japan adopting some unexpected monetary policy, we may fluctuate between $100,000 and $110,000 until the end of the FOMC meeting at the end of this month," the trader said.

The analyst pointed out that since no interest rate cut is currently expected on January 29, there is the possibility of another sell-off. The CME FedWatch tool currently predicts a 99.5% chance that interest rates will remain unchanged at 4.25% to 4.5%.