Bitcoin Could Fall Further… Here’s What The Experts Are Saying
After hitting an all-time high in December, Bitcoin suffered a brutal correction, losing nearly 10% of its value in a matter of weeks. This decline cannot be explained only by a simple market cycle, but by a tense economic context. U.S. inflation, which is becoming more sustainable, is reducing the Federal Reserve’s (Fed) room to maneuver, delaying hopes of a rate cut. The situation is increasing pressure on risk assets, including bitcoin, which is losing appeal in the face of a rising dollar and rising bond yields. The upcoming release of the Consumer Price Index (CPI) on January 15 could highlight this trend. According to Steno Research, higher-than-expected inflation could trigger further liquidations and cause BTC to fall below $85,000. But the danger does not come only from macroeconomic data. The Bitcoin derivatives market remains overheated, supporting excessive leverage that increases volatility. Between the economic uncertainties and the weakening of speculative positions, the cryptocurrency is developing in a zone of instability, where any economic announcement can cause a big movement.
Bitcoin weakened by uncertain economic climate
Since mid-December, Bitcoin has been in bearish momentum, dropping from $106,000 to around $96,000. This decline is taking place in a tense macroeconomic context characterized by increased inflation and tighter monetary policy by the US central bank (Fed). The latest US employment report, released on January 10, highlighted a strong labor market and supported the view that interest rates will remain high for an extended period.
This currency uncertainty helped strengthen the US dollar and put additional pressure on risk assets including Bitcoin. “Bitcoin appears to be held back by the strength of the dollar, which is rising due to a tighter Fed and new tariff threats,” said Zach Pandl, head of research at Grayscale. At the same time, 10-year government bond yields continue to rise, reflecting investor concerns about the outlook for inflation.
Indeed, in this risk-averse climate, the next consumer price index (CPI), expected on January 15, appears to be the deciding factor. According to Steno Research, inflation above the expected 0.3% could trigger a new wave of crypto market selloffs and potentially push Bitcoin below $85,000.
Overheated futures markets, another risk
If the macroeconomic environment is heavily weighing on Bitcoin, derivatives markets are also intensifying selling pressure. Despite the recent correction, open positions in BTC futures remain at high levels, a sign that many investors remain overleveraged. This situation creates an additional risk. If Bitcoin falls further, cascading liquidations could exacerbate volatility and accentuate the market’s decline.
According to Steno Research, the $85,000 mark could be reached if US inflation turns out to be higher than expected. “An upward deviation in the CPI data could surprise the market and cause another shock to cryptocurrency prices,” the analysts explain. The impact of such a scenario would not be limited to cryptocurrencies. A stronger dollar and higher bond yields would lure more investors away from risky assets.
However, this brutal correction would not challenge the long-term bullish outlook. Steno Research estimates that 2025 could be a record year for Bitcoin, driven by lower interest rates, a more favorable regulatory climate and the traditional post-halving effect. For now, caution remains in order as any new economic data could redefine the market’s trajectory.
In the short term, investors will face sustained downward pressure, fueled by macroeconomic uncertainties and a tight derivatives market. However, Steno Research expects a strong recovery during 2025, driven by several catalysts. Falling interest rates, a more favorable regulatory framework and the impact of the halving could create the conditions for a new bull cycle. Analysts estimate that Bitcoin could surpass $150,000 and reach new all-time highs. Until then, volatility remains a key element of the market. Between economic adjustments and strategic relocation of investors, Bitcoin will have to find a balance before entering a new phase of expansion. Caution remains in order as any macroeconomic data can affect the market trajectory in the short term.
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A graduate of Sciences Po Toulouse and holder of the blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I made a commitment to raise awareness and inform the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and take advantage of the opportunities it offers. Every day I try to provide an objective analysis of current events, decipher market trends, convey the latest technological innovations and put into perspective the economic and social problems of this ongoing revolution.
DISCLAIMER OF LIABILITY
The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.
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