Bitcoin is hovering close to the $97,000 level, with the anticipated decline not commencing this week. If last week’s employment report had favored the bulls, combined with this week’s inflation data, it could have fostered a more favorable environment. However, things remain on track in the cryptocurrency sector, as the Federal Reserve’s independence is perceived as temporarily beneficial for crypto. Exciting developments have taken place, and Fidelity outlines four reasons supporting bull markets this year.
Reasons for an Altcoin Bull Market
Those who sold in the last quarter anticipating a bear market acceleration by 2026 were disappointed. Midway through January, Bitcoin is reaching new highs rather than lows, differing from the bearish conditions of 2022.
Meanwhile, interest rate cuts continue at a slow pace, and quantitative easing (QE) lies ahead of us. Although the Federal Reserve is taking gradual steps, the current trajectory leans towards QE, where cryptocurrencies have performed excellently historically. It is illogical to predict the start of bear markets during QE. Fidelity suggests four key reasons for an altcoin bull market:
- •Global easing is commencing.
- •Quantitative tightening (QT) is over; now QE begins.
- •M2 money supply growth is set to accelerate again by 2026.
- •Bitcoin is finally closing the gap with other assets.
For the altcoin bull season, ETH is once again expected to lead the rallies. Poppe stated in today’s assessment that a major squeeze is about to trigger an upward breakout.
“A major squeeze is happening in ETH, which might lead to a breakout next week. This is a great sign for the markets, as ETH staying above the 21-day moving average against Bitcoin indicates more risk appetite shifting towards altcoin markets.”
Significant Developments
Yesterday, the Supreme Court did not release the expected tariff decision, pushing the anticipation to next week. This delay is crucial for breaking the short-term negative pressure, yet a tariff decision is still pending. Some attribute the delay to a potential pro-Trump decision, but predicting the outcome remains challenging. Expert predictions currently suggest a 70% likelihood of the decision favoring the cancellation of tariffs.
The significant developments from the last 24 hours are summarized as follows:
- •Trump announced a 25% customs duty on semiconductors imported from abroad.
- •Indicating reduced tensions with Iran, Trump lowered WTI crude oil below $60.
- •JPMorgan projects the ~$130 billion crypto flow from 2025 will continue this year.
- •Ripple received preliminary approval of EMI from Luxembourg under MiCA.
- •The Zcash Foundation announced the SEC concluded its investigation without enforcement actions.
- •The US completed a $500 million Venezuelan oil sale.
- •The Sui network is back online, functioning normally.
- •CZ reiterated his long-term vision: Bitcoin reaching $200,000, though the timing remains uncertain.