As 2025 approaches, Bitcoin (CRYPTO:BTC) finds itself navigating a changing macroeconomic landscape, with increasingly fading tailwinds. Concerns about continued momentumAccording to a report.
What happened: the The Federal Reserve’s hawkish stancealong with broader macroeconomic headwinds, signal a year of extreme caution for traders and investors. 10x search Friday’s report said.
“Some of the indicators we are monitoring indicate that the air is becoming thinner,” the report warned.
These sentiments loom larger now, as Bitcoin’s recent failed wedge breakout puts its bullish momentum at risk.
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Traders are advised to remain vigilant as these technical signals highlight the growing risks of the cryptocurrency.
The situation highlights a broader narrative: Bitcoin’s ability to maintain its support level depends on external factors that may no longer be favorable.
One of the more surprising concerns is the diminishing effect Accurate strategy(NASDAQ:MSTR) Aggressive Bitcoin accumulation.
The company has spent $16 billion to acquire nearly 159,000 bitcoins since November.
While this announcement initially sparked optimism, Bitcoin’s price rise has been modest, and MicroStrategy’s stock price has been largely stagnant.
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“Despite the massive $16 billion purchase, Bitcoin’s nearly 10% rise over this period raises questions about the strength of the broader market,” the report notes.
This disparity suggests that even significant bullish catalysts may not be enough to push the market higher.
Monetary policy also casts a long shadow on Bitcoin’s 2025 outlook.
The Federal Reserve’s decision to cancel its commitment to raise interest rates in late January 2024 initially led to a strong rally.
However, the lack of a clear timetable for interest rate cuts led to a six-month consolidation phase.
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Although Bitcoin saw another rally in September after the Fed’s first interest rate cut, the central bank’s December meeting reignited uncertainty.
Analysts note that the Fed is unlikely to take a dovish stance in early 2025, which could keep Bitcoin in a dull trading range.
Inflation data further complicates the picture. Despite the Fed’s efforts, progress in reducing inflation has been minimal. Bond yields remain high, with two-year Treasury yields at 4.3%.
This continuation creates tighter liquidity conditions, offsetting Treasury measures to lower refinancing rates.
The Treasury Department’s announcement of the repatriation on February 5 next year is expected to provide important insights into how US debt strategies will evolve under the new administration.
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What’s next: The upcoming Treasury Secretary’s potential reversal of reliance on short-term debt could bring additional volatility, raising further concerns for Bitcoin traders.
Market participants are also closely monitoring inflation reports scheduled for January 15 and February 12 onwards.
These data points 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 increasing Linked to macroeconomic trendsQ.
“Although we do not want to turn too bearish, it is clear that market tailwinds may be fading,” the report concludes.
Analysts are cautious but not dismissive of Bitcoin’s resilience, stressing that although it is still above $95,000, the risk of increased volatility and prolonged consolidation remains.
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This article Bitcoin’s 2025 Forecast Suddenly Looks Uncertain: Here’s Why Originally appeared on Benzinga.com
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