Three Key Events Influencing Crypto Markets This Week: Bitcoin’s Psychological Barrier At $100K

The crypto market and Bitcoin has kicked off 2025 with strong momentum. It was buoyed by a “Santa rally” that saw $280 billion flow into digital assets in just a few days. 

As Bitcoin flirts with the psychological $100,000 mark and Ethereum hits multi-week highs, this week promises to bring critical developments that could shape the trajectory of crypto markets. 

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Key Factors To Watch: Economic Data And Federal Reserve Signals

Economic indicators released this week will play a pivotal role in determining market sentiment, with a particular focus on labor market data and Federal Reserve policy.

Monday, 6 January 2025– S&P Global Services PMI, an indicator of business conditions in the services sector.

Tuesday, 7 January 2025 – ISM Services PMI and November JOLTS Job Openings report.

Wednesday, 8 January 2025 – December ADP Nonfarm Employment data and Federal Open Market Committee (FOMC) meeting minutes.

Friday, 10 January 2025 – December Nonfarm Payrolls, US Unemployment Rate, Michigan Consumer Sentiment Index, and Consumer Inflation Expectations.

These reports will provide insights into the health of the US economy and influence the Federal Reserve’s monetary policy stance. 

The Fed recently cut interest rates to 4.25%-4.5% but remains cautious about further easing due to inflation concerns. 

If labor market data shows resilience, it could signal a less accommodative Fed, potentially dampening risk appetite for cryptocurrencies like Bitcoin. Conversely, weaker-than-expected employment figures might bolster expectations for more rate cuts, providing a tailwind for crypto markets.

Strong labor market data could strengthen the US dollar and reduce Bitcoin’s appeal as a hedge against inflation. However, weak data may increase expectations for dovish monetary policies, boosting demand for risk assets like cryptocurrencies.

The FOMC meeting minutes will offer clues about the Fed’s 2025 rate strategy. Hawkish signals could trigger short-term volatility, while dovish hints might fuel a crypto rally.

This is surreal.

US to create Strategic Bitcoin Reserve in just 2 Weeks! pic.twitter.com/gFlEc2tD8I

— Giovanni Incasa (@GiovanniIncasa) January 3, 2025

Bitcoin’s Psychological Barrier At $100K

Bitcoin is at a critical juncture as it approaches the $100,000 milestone. 

Over the past week, Bitcoin has gained 7.5%, reaching $99,000 during early trading in Asia on Monday. 

Ethereum has mirrored this trend, climbing to $3,670—its highest level since mid-December.

Bitcoin’s recent rally has been supported by institutional adoption, regulatory clarity following the approval of spot Bitcoin ETFs in 2024, and optimism surrounding pro-crypto policies under the new US administration.

Analysts are optimistic about Bitcoin’s long-term prospects, with some projecting prices as high as $200,000 by year-end 2025.

However, short-term resistance at $100K could lead to profit-taking or consolidation before another leg up.

While a decisive break above $100K could signal continued bullish momentum and attract new investors, failure to breach this level might result in a temporary pullback or sideways trading.

Global Economic Factors Will Influence Crypto Markets 

China’s economic performance remains under scrutiny as its real estate sector grapples with challenges that could have ripple effects on global markets. Strong manufacturing PMI data from China could boost global risk sentiment and drive inflows into cryptocurrencies.

Meanwhile, inflation and employment data from Germany, France, and Italy will guide European Central Bank (ECB) policy decisions. Dovish signals from the ECB could enhance risk appetite for cryptocurrencies.

The upcoming earnings season will provide insights into corporate performance amidst economic uncertainties. Positive earnings reports could lift overall market sentiment, indirectly benefiting crypto assets.

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