As 2025 approaches, Bitcoin (CRYPTO: BTC) is navigating a changing macroeconomic landscape, with headwinds easing and concerns about sustained momentum, according to a recently released report.
What happened
The Fed’s hawkish stance, coupled with broader macroeconomic headwinds, suggests a year of greater caution for traders and investors, the report said Friday. by 10x Research.
“Some indicators we monitor suggest that the air is becoming thinner,” the report warned.
This sentiment is aggravated now, with Bitcoin’s recent failed gap breakout putting its bullish momentum in jeopardy.
Traders are advised to remain vigilant as these technical signals highlight increasing risks for the Cryptocurrency.
The situation highlights a broader narrative: Bitcoin’s ability to maintain its support level depends on external factors that may have ceased to be favorable.
One of the most striking concerns is the diminishing impact of Bitcoin’s aggressive accumulation of MicroStrategy (NASDAQ:MSTR).
The company has spent $16 billion acquiring approximately 159,000 BTC since November.
Although this announcement initially sparked optimism, Bitcoin’s price appreciation has been modest and MicroStrategy’s share price has largely stagnated.
“Despite the massive purchase of $16 billion, the rise in the price of Bitcoin of approximately 10% during this period raises questions about the strength of the overall market,” the report notes.
This disparity suggests that even significant bullish catalysts may no longer be enough to drive the market higher.
Monetary policy also casts a long shadow over Bitcoin’s prospects in 2025.
The Federal Reserve’s decision to remove its commitment to rate hikes at the end of January 2024 initially sparked a sharp rally.
However, the lack of a clear timetable for rate cuts led to a six-month consolidation phase.
Although Bitcoin saw another rally in September following the Fed’s first rate cut, the central bank’s December meeting resurrected uncertainty.
Analysts note that the Fed is unlikely to adopt a softening stance in early 2025, which could keep Bitcoin in a lackluster trading range.
Inflation data further complicates the picture. Despite the Federal Reserve’s efforts, progress in reducing inflation has been minimal. Bond yields remain elevated, with 2-year Treasury yields at 4.3%.
This persistence creates tighter liquidity conditions, which offset Treasury measures aimed at reducing refinancing rates.
The Treasury refund announcement on February 5 next year is expected to provide critical insight into how US debt strategies may evolve under the new administration.
You can also read: BlackRock hints at change in Bitcoin supply: is the 21 million limit over?
What comes next
The possible rollback of confidence in short-term debt by the incoming Treasury Secretary could introduce additional volatility, adding to the concerns of Bitcoin traders.
Market participants are also closely watching the inflation reports scheduled for January 15, February 12 and beyond.
This data will play an important role in shaping expectations around Federal Reserve policy, which is seen as a key driver of Bitcoin’s performance.
The report highlights the importance of these external forces, noting that Bitcoin’s fate is increasingly tied to macroeconomic trends.
“While we do not want to become too bearish, it is clear that the tailwinds supporting the market may be fading,” the report concludes.
Analysts are cautious but do not disdain Bitcoin’s resistance, and emphasize that, although it remains above $95,000, the risk of greater volatility and prolonged consolidation remains.
Image: Shutterstock
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