Bitcoin (BTC) investors should prepare for potential further drops, as surging U.S. prices are shaping a progressively challenging macroeconomic climate for riskier assets, according to Steno Research’s recent report dated January 13th.
From mid-December onwards, the price of a single Bitcoin has dropped approximately 10%, falling from its record peak of approximately $106,000 to around $96,000 by January 14th. According to Steno’s prediction, this downward trend might persist, potentially causing Bitcoin’s value to dip as low as $85,000 per coin.
Steno stated that the recent drop in the value of the cryptocurrency is primarily due to a persistent adjustment in its price caused by an adverse economic climate, where inflation remains a significant concern.
Currently, Bitcoin’s derivative markets are showing signs of being too heated up, suggesting that there is still a significant amount of leveraged positions that need to be reduced during this period of price adjustment, as stated in the report.
According to Steno, prolonged inflation in the U.S. might increase stress on the cryptocurrency market, potentially exacerbating current unfavorable conditions before prices recover and turn positive again.
Macroeconomic unease
On January 10th, a strong U.S jobs report caused Bitcoin‘s current market value to drop below $93,000 as the US dollar strengthened due to predictions of reduced future interest rate reductions.
In futures trading, the likelihood of an interest rate cut in January is now estimated to be less than 3%, based on data from CME FedWatch.
It appears that Bitcoin’s growth might be limited because of the growing strength of the U.S. dollar,” said Zach Pandl, Head of Research at Grayscale, during a conversation with CryptoMoon on January 10th. This strengthening is due to a more aggressive monetary policy by the Federal Reserve and potential tariffs.
Lower interest rates generally benefit risky assets such as BTC.
Steno believes that the upcoming U.S. Consumer Price Index (CPI) report, scheduled for January 15, might indicate a rise in inflation rates above the predicted level. Specifically, it is forecasting an increase of approximately 0.4% in the monthly headline prices compared to the anticipated 0.3%.
If Steno’s prediction turns out to be correct, the positive outcome might take markets by surprise, potentially causing more decline in the values of digital assets.
In this specific situation, our prediction is that the value of a single Bitcoin might decrease to around $85,000.
However, Steno anticipates that the year 2025 could see unprecedented success for the cryptocurrency market. He predicts that Bitcoin will reach new record highs, and there may be several other significant, positive advancements in the industry.
In 2025, according to Steno’s prediction, Bitcoin could reach $150,000 per coin. He based this on several factors such as a highly advantageous regulatory landscape for cryptocurrencies, a robust economic environment characterized by falling interest rates and enhanced liquidity, and the traditionally impressive performance of Bitcoin following its halving event.
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2025-01-14 21:50