Market update: Bitcoin heading toward new ATH due to U.S. interest rate decision?

With a current value of US$105,500, Bitcoin is just 3.44 percent below its all-time high (ATH). The main cryptocurrency has risen about three percent in the past 24 hours. In the month of January, Bitcoin has already surged 14 percent.

Its market capitalization now stands at $2.08 trillion. This maintains Bitcoin's position among the world's ten most valuable assets, and places it in the ranking just above Saudi Aramco and just below Alphabet (Google).

The altcoin market has not seen any major price gains so far. Only Ethereum and Solana show noticeable gains on a daily basis. The Fear & Greed Index is currently at "neutral."

The reason behind Bitcoin's strong performance is the U.S. Federal Reserve's (Fed) interest rate decision. On Jan. 29, the Fed decided to keep U.S. interest rates at 4.5 percent because of persistently high inflation rates.

Bitcoin Spot ETFs experienced net inflows of $92 million. The moderate price appreciation caused nearly 100,000 investors to liquidate, which, according to data from Coinglass results in a US$277 million loss for this group of investors.

Whether the Bitcoin price will rise further remains to be seen. However, a temporary price correction could occur, especially if investors decide to take profits.