On Dec. 31, 2024, popular crypto analyst @matt_utxo shared on X his predictions for Bitcoin and MicroStrategy (Nasdaq: MSTR) in 2025.
Matt predicts that MicroStrategy’s stock, which has experienced significant declines, is in the process of bottoming. He expects the stock to stabilize between $270 and $300, potentially dipping as low as $250 briefly. He notes strength in the $270 to $300 range and suggests that this could provide buying opportunities over the next couple of weeks. He predicts a strong recovery in the first quarter of 2025, with momentum building as the year progresses.
Source: Google Finance
According to Matt, MSTR’s sharp decline from its November high of $540 is the result of what he describes as the “popping bubble.” He explains that the stock’s decoupling from Bitcoin to the upside during its rally has now reversed, leading to what he calls a reverse gamma squeeze. He adds that traders unwinding their positions and broker-dealers selling shares have amplified the downward pressure but believes the decline may soon end.
Matt also talks about signs of strength in MSTR, including bullish divergence on the 4-hour relative strength index (RSI), which suggests the stock’s price could stabilize and recover. He argues that a reset in valuation has made MSTR more attractive and expects its correlation with Bitcoin to increase in 2025, driving potential outperformance.
Matt emphasizes Bitcoin’s pivotal role in influencing MSTR’s performance. He predicts that Bitcoin is entering a historically strong year following its 2024 halving. While many expect BTC to revisit the $80,000 range, Matt notes that $92,000 has provided strong support and absorbed significant sell pressure. He expects Bitcoin to break above $100,000 in January and move to $125,000 in February, aligning with Bitcoin’s seasonal strength during this period.
He points out similarities between Bitcoin’s current price structure and early 2024, when several spot Bitcoin ETFs were approved. Matt believes these patterns indicate a strong first quarter for Bitcoin, supported by bullish RSI divergence and broader market optimism. While macroeconomic factors such as global liquidity and the dollar’s strength could influence Bitcoin’s trajectory, Matt expects historical trends and positive sentiment to prevail.
Matt identifies several near-term catalysts that could shape Bitcoin and MSTR’s performance:
FTX Repayments: According to Matt, starting Jan. 3, $16 billion could be returned to Bitcoin and crypto investors over 30 to 60 days, which he predicts may inject liquidity into the market.
U.S. Debt Ceiling: Matt forecasts that the expiration of the U.S. government’s debt ceiling on Jan. 1 could create short-term unease. However, he expects markets to recover quickly afterward.
S&P 500 Trend Reversal: Matt believes that a bullish reversal in the S&P 500 could support Bitcoin and MSTR’s recovery as broader market conditions improve.
FASB Implementation and S&P 500 Inclusion: Matt anticipates that these events, scheduled for mid-2025, could boost institutional interest in MSTR and Bitcoin-related assets.
Matt expects increased volatility for MSTR in 2025 due to the company’s use of convertible debt and accretive equity issuance to acquire more Bitcoin. He believes this strategy will strengthen MSTR’s balance sheet while driving its premium higher. He notes that MSTR’s under-levered position provides room for management to take on additional debt, further increasing the company’s Bitcoin holdings.
Matt discusses Bitcoin’s status as a macro asset and its correlation with global liquidity trends. He expects the dollar to weaken in early 2025, supporting Bitcoin’s price. He also notes that global credit expansion, driven by commercial bank lending, is likely to continue despite higher interest rates. According to Matt, these macroeconomic dynamics, along with Bitcoin’s historical post-halving strength, set the stage for a strong year for the cryptocurrency.
