A significant alert regarding the U.S. debt limit could potentially lead to a short-term decrease in the value of Bitcoin, estimated around $70,000, before it continues to rise again within the market trend.
On the day following Donald Trump’s inauguration as President, which takes place on January 20th, the United States Treasury is expected to reach its debt limit of $36 trillion.
According to a letter published on the 17th of January, Treasury Secretary Janet Yellen has declared a pause in debt issuance, starting from the 21st of January and expected to continue until the 14th of March.
The temporary halt in debt issuance for nearly two months might indicate decreasing global funds availability, which could be a warning sign for Bitcoin’s price movements, even though it reached a record high of over $109,000 on January 20th.
According to the CEO of Global Macro Investor, Raoul Pal, Bitcoin is expected to reach a “peak” above $110,000 in January next year. However, an increase in liquidity might cause a more significant drop afterward. This prediction was made in a recent blog post published on November 29th.
According to its relationship with the worldwide liquidity index, it’s predicted that the price at which Bitcoin can be sold (its highest asking price) could reach approximately $110,000 around January, but is likely to drop below $70,000 by February.
Bitcoin correction depends on institutional reaction
Not all analysts are concerned about the debt ceiling’s impact on Bitcoin.
In contrast to conventional markets preparing for reduced cash flow, Bitcoin’s price could experience varied effects due to the debt ceiling, as suggested by Marcin Kazmierczak, co-founder and COO of Redstone.
Investors may even start seeing BTC as a hedge against monetary instability, he siad.
In past instances of debt ceiling disputes, Bitcoin’s relationship with conventional liquidity measures within the market has been somewhat unpredictable. It’s crucial to monitor institutional actions and determine if this event increases overall market apprehension, Kazmierczak advised CryptoMoon.
Alvin Kan, head of operations at Bitget Wallet, noted that the unpredictability seen in traditional financial markets could potentially affect the cryptocurrency market as well.
“It could lead to a broader market risk-off environment, potentially impacting Bitcoin negatively. The outcome would largely depend on investor behavior, economic policy responses, and global financial sentiment.”
As a researcher, I’m anticipating an increase in global liquidity following March 14, which could potentially be a positive indicator for Bitcoin’s price trend throughout the remainder of 2025.
According to predictions by Jamie Coutts, Chief Crypto Analyst at Real Vision, the worldwide total of cash and short-term bank deposits (referred to as M2 money supply) is expected to reach its highest point on January 26, 2026.
According to Coutts, it’s possible that the increasing amount of money in circulation might drive the value of Bitcoin up to more than $132,000 by the year 2025.
For the remainder of the 2025 market cycle, some are anticipating more optimistic price projections for Bitcoin, with asset management company VanEck suggesting it could rise to approximately $180,000 following a possible 30% decline in the first quarter of 2025.
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2025-01-20 17:13