Bitcoin surged to above $76,000 after Donald Trump’s election win, signaling strong optimism among crypto traders. Following a 6.6% increase within 24 hours, BTC has rallied over 21% in the past month, echoing what’s becoming known as the “Trump trade.” As the Federal Reserve moves towards another rate cut, many believe this trend could continue, with lower rates favoring Bitcoin as an alternative investment.

• Bitcoin hits a new all-time high of $76,000 following Donald Trump’s election victory.

• Markets anticipate a 0.25% Federal Reserve rate cut, which could favor Bitcoin.

• Traders are cautious of Fed Chair Powell’s comments on Trump's policies.

• Analysts forecast a bullish momentum for BTC through 2025, targeting a “sweet spot” of $130,000–$150,000 by next year.

All eyes are on Fed Chair Jerome Powell’s comments. A “hawkish” stance could dampen market enthusiasm, but a “dovish” approach would likely signal further rate cuts. Analysts see Powell’s response to Trump’s economic policies as critical. While the rate cut itself is expected, traders are concerned about potential hawkish language that might signal limited future cuts, leading to short-term volatility in BTC.

High probability for a 0.25% rate cut in Fed’s November meeting | Source: CME FedWatch 

This Thursday, the Fed is expected to announce a 0.25% rate cut, a move that traditionally bolsters risk assets like Bitcoin. A lower interest rate typically weakens the dollar, pushing investors towards assets perceived as stores of value. According to Polymarket and CME FedWatch, there’s a 97% chance of a quarter-point cut, giving BTC a strong tailwind.

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Bitcoin’s rally to $76,000 has generated significant excitement among investors, with some analysts forecasting a possible surge to $130,000 or even $150,000 by next year. Peter Brandt, a veteran trader, noted that BTC has entered a “sweet spot” within its four-year halving cycle, a period often associated with bullish price action. If historical patterns hold, Bitcoin’s upward trajectory could persist well into 2025, driven by increased scarcity and growing demand.

Adding to this bullish outlook, CryptoQuant highlights Bitcoin’s Market Value to Realized Value (MVRV) ratio, which remains far from peak levels. This ratio, a key metric for gauging market sentiment, indicates that BTC is “not overheated,” suggesting room for further growth without immediate risk of a major pullback.

Bitcoin’s Open Interest (OI) | Source: CoinGlass 

Furthermore, Bitcoin’s Open Interest (OI) in futures markets has surged to an all-time high of $45.4 billion, underscoring heightened investor interest. OI measures the total number of outstanding contracts, with a rise signaling that more traders are committing to the market, either by taking long positions to benefit from further gains or by shorting in anticipation of corrections. This growing OI reflects optimism and suggests that traders are confident in Bitcoin’s current “sweet spot” for continued gains.

With Bitcoin’s current momentum and supportive macroeconomic factors, many see this period as potentially transformative. If the bullish cycle continues as anticipated, Bitcoin could reach new highs, marking 2025 as a potentially historic year for the world’s largest cryptocurrency.

With inflation concerns on the rise and the dollar facing pressure, Bitcoin’s appeal as a hedge continues to grow. BTC’s recent high has boosted Open Interest in Bitcoin futures to $45.4 billion, reflecting high investor confidence. Should Powell refrain from commenting on Trump’s policies, Bitcoin’s upward momentum may remain intact, with the market eyeing continued gains.

Read more: Is Bitcoin a Strong Hedge Against Inflation? 

The Potential Global Impact of U.S. Policy on Bitcoin

According to news reports on Reuters, Trump’s proposed tax cuts and tariffs could stir inflation, potentially keeping interest rates elevated. China, facing tariff pressure, is likely to respond with its own stimulus, adding complexity to global markets. This dynamic could impact Bitcoin’s stability, as currency shifts and increased liquidity drive crypto volatility.

Bitcoin’s record highs come amid historic economic shifts, with rate cuts, global trade dynamics, and evolving U.S. policies shaping the landscape. As BTC finds its stride in a complex macro environment, traders remain optimistic about its future, despite potential Fed headwinds. The market watches closely, anticipating the next moves from the Fed and the unfolding impact of Trump’s policies on both the dollar and Bitcoin.

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