Bitcoin has been facing a decline in value since mid-December 2024, dropping from $106,000 to around $97,000 by Jan. 14, 2025.
Bitcoin has been facing a decline in value since mid-December 2024, dropping from $106,000 to around $97,000 by Jan. 14, 2025. Steno Research warns that further losses could be on the horizon as the cryptocurrency struggles with unfavorable macroeconomic conditions, particularly rising inflation. In a report published on Jan. 13, Steno suggests Bitcoin’s price could fall to as low as $85,000 due to these factors.
The report highlights that inflation has become a central issue, with the U.S. Consumer Price Index (CPI) expected to show a 0.4% rise in January, surpassing expectations of 0.3%. If this forecast is correct, the surprise inflation data could lead to further downward pressure on Bitcoin prices. The overheated derivatives market also presents a problem, with high open interest in Bitcoin futures signaling excess leverage. Steno points out that this excess leverage needs to be unwound, which could lead to additional sell-offs.
The U.S. dollar's strength has further impacted Bitcoin, with a positive jobs report on Jan. 10 leading to expectations of slower interest rate cuts. This caused the dollar to rise, which negatively affected Bitcoin’s spot price. Markets currently predict less than a 3% chance of an interest rate cut in January. Typically, lower interest rates benefit risky assets like Bitcoin, but the current policy stance has put pressure on the cryptocurrency.
Despite these challenges, Steno’s long-term outlook for Bitcoin remains optimistic. The firm believes that by 2025, Bitcoin could reach $150,000 per coin, driven by a more favorable regulatory environment, declining interest rates, and the historical strength of Bitcoin following halving events. The research also anticipates a supportive macroeconomic climate and improved liquidity, which could help drive the recovery.
However, in the short term, Bitcoin will likely continue facing downward pressure due to the ongoing inflation concerns and high leverage in futures markets. Steno emphasizes that while the current environment is difficult for Bitcoin, the cryptocurrency’s long-term potential remains strong, and it could reach new highs in 2025. Investors are advised to remain cautious in the near term, as the market works through these challenges.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
