As 2025 approaches, Bitcoin (CRYPTO:BTC) is amid a changing macroeconomic landscape, with diminishing tailwinds raising concerns about continued momentum, according to a report.
What happened: The Federal Reserve’s hawkish stance, coupled with broader macroeconomic headwinds, signals a year of heightened caution for traders and investors. 10x Research reported it on Friday.
“Some indicators we are monitoring indicate that the air is thinning,” the report warned.
This sentiment looms larger now as Bitcoin’s recent failed breakout threatens its bullish momentum.
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Traders are advised to remain vigilant as these technical signals highlight the increased risks to the cryptocurrency.
The situation highlights a broader story: Bitcoin’s ability to maintain its support level depends on external factors that may no longer be favorable.
One of the most notable concerns is the declining impact of MicroStrategy‘s (NASDAQ:MSTR) aggressive Bitcoin accumulation.
The company has spent $16 billion acquiring approximately 159,000 BTC since November.
While this announcement initially sparked optimism, Bitcoin’s price increase has been modest and MicroStrategy’s stock price has largely stagnated.
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“Despite the massive $16 billion purchase, Bitcoin’s price gain of roughly 10% over this period raises questions about the strength of the broader market,” the report said.
This disparity suggests that even significant bullish catalysts may no longer be enough to drive the market higher.
Monetary policy also casts a long shadow over Bitcoin’s prospects for 2025.
The Federal Reserve’s decision to lift its commitment to rate hikes at the end of January 2024 initially led to a strong rally.
However, the lack of a clear timetable for interest rate cuts resulted in a six-month consolidation phase.
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Although Bitcoin rallied again in September following the Fed’s first rate cut, the December central bank meeting once again created uncertainty.
Analysts note that the Fed is unlikely to adopt a dovish stance in early 2025, which could keep Bitcoin within a moderate trading range.
Inflation data further complicates the picture. Despite the Federal Reserve’s efforts, progress in reducing inflation has been minimal. Government bond yields remain high, with a yield on two-year government bonds of 4.3%.
This persistence creates tighter liquidity conditions and offsets the measures taken by the Ministry of Finance aimed at lowering the refinancing rate.
The Treasury’s repayment announcement on February 5 next year is expected to provide critical insights into how US debt strategies may evolve under the new administration.
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What’s next: The new Treasury Secretary’s potential reversal of reliance on short-term debt could create additional volatility, causing further concerns for Bitcoin traders.
Market participants are also closely watching inflation reports scheduled for January 15, February 12 and beyond.
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 emphasizes the importance of these external forces, noting that Bitcoin’s fate is increasingly tied to macroeconomic trends.
“While we do not want to become too bearish, it is clear that the tailwinds supporting the market may be waning,” the report concludes.
Analysts are cautious, but not dismissive of Bitcoin’s resilience. They emphasize that while the value remains above $95,000, the risk of increased volatility and prolonged consolidation remains.
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This article Bitcoin’s 2025 Outlook Suddenly Looks Uncertain: Here’s Why it originally appeared on Benzinga.com
