Bitcoin (BTC) faced a significant decline on January 13, 2025, with prices plummeting below $90,000 for the first time since mid-November. The drop, which saw daily losses near 5%, coincided with a broader sell-off in the crypto market, as the strength of the US dollar continued to exert pressure on risk assets like cryptocurrency.
As the US dollar surged, fueled by macroeconomic uncertainty and the impending inauguration of US President-elect Donald Trump, Bitcoin’s price suffered, violating its two-month streak above $90,000. Data from Cointelegraph Markets Pro and TradingView revealed the rapid downturn, which also triggered liquidations exceeding half a billion dollars in crypto long positions, according to CoinGlass.
The sell-off extended to traditional financial markets, with the S&P 500 and Nasdaq Composite Index opening down by 0.8% and 1.6%, respectively. Amid this turbulence, bearish predictions for Bitcoin resurfaced. Keith Alan, co-founder of Material Indicators, suggested that BTC’s price could fall as low as $69,000, referencing a technical support level near the $86,000 mark where the 100-Day Moving Average (MA) meets the bottom of the recent consolidation channel.
However, there were glimmers of optimism in the market. Some analysts pointed to the lowest funding rates since August 2024 as a potential turning point. Popular trader Daan Crypto Trades also highlighted striking similarities between current price action and January 2024, suggesting that the market might be following a similar pattern.
Additionally, QCP Capital noted that upcoming US macroeconomic data, particularly inflation and employment reports, could further drive volatility in the market. With December’s nonfarm payrolls (NFP) data significantly surpassing expectations, concerns about inflation resurfaced, reinforcing the case for the Federal Reserve’s “higher for longer” interest rate policy.
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As Bitcoin faces pressure from macroeconomic factors, traders are closely watching to see if the cryptocurrency can prove its resilience as a hedge against inflation in these turbulent times.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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