Bitcoin's (BTC) recent price dip to $92,500 has been linked to rising concerns about the Federal Reserve's tightening monetary policy and growing bond yields. Analysts suggest these macroeconomic factors could heavily influence Bitcoin's price trajectory in 2025.
Key Drivers of Bitcoin's Price Dip
Federal Reserve Policy Tightens Market Sentiment
Bitcoin (BTC) briefly surpassed the $100,000 psychological mark on Jan. 7, only to retreat to $92,500, according to Cointelegraph Markets Pro data. Ryan Lee, chief analyst at Bitget Research, attributed the correction to strong U.S. economic data, which signals potential interest rate hikes:
“Bitcoin’s dip stems primarily from strong US economic data pointing toward potential interest rate hikes. This development makes cryptocurrencies less attractive as investments, while the Federal Reserve’s signals of tighter monetary policy further intensify market corrections,” Lee told Cointelegraph.
Liquidations Add to Downward Pressure
The correction resulted in over $631 million worth of leveraged long positions being liquidated in the past 24 hours, as per CoinGlass data. Such events often lead to a consolidation phase as traders adjust their positions, further influencing Bitcoin’s (BTC) price.
Will Bitcoin Drop to $90,000?
Market analysts believe Bitcoin (BTC) could test the $90,000 level before resuming its upward momentum. John Glover, Chief Investment Officer of Ledn, suggested that Bitcoin may need one more correction to break out of its current illiquidity phase:
“This could lead us to test the $90,000 level again before the next significant move higher. Using wave analysis, we appear to be completing what I view as the fourth wave, suggesting a rally toward the $126,000–$128,000 range following this consolidation phase,” Glover explained.
Rekt Capital, a popular crypto analyst, highlighted the importance of the $91,000 support level in a Jan. 8 post:
“Bitcoin has failed its Daily retest, losing $101,165 convincingly as support. As a result, Bitcoin has reverted back into its $91,000–$101,165 range once again.”
Long-Term Outlook for Bitcoin
Despite short-term bearish sentiment, analysts remain optimistic about Bitcoin’s long-term trajectory. Projections suggest a cycle top above $150,000 by late 2025, driven by a potential $20-trillion increase in the global money supply, which could attract $2 trillion of investment into Bitcoin, according to Cointelegraph.
