Bitcoin (BTC) recently experienced a significant dip, plummeting to $93,000. This downturn, according to a new report by 10x Research, is a confluence of macroeconomic shifts, technical signals, and on-chain trends. While the immediate outlook may appear bearish, the analysts project a positive trajectory for Bitcoin in 2025, aligning with its historical cyclical patterns and broader economic trends.
One of the key factors driving Bitcoin’s decline is the Federal Reserve’s cautious approach to monetary easing. The FOMC minutes, as highlighted in the 10x Research report, suggest a potential pause in further rate cuts. This represents a significant shift, removing a crucial tailwind that has historically fueled Bitcoin’s growth. The absence of this stimulus from loose fiscal policies has exposed vulnerabilities in Bitcoin’s price action, hindering its upward momentum.
Furthermore, Bitcoin’s price is closely correlated with global money supply changes. The report emphasizes that over the past year, alterations in the money supply have preceded Bitcoin’s price movements by approximately ten weeks. This lagged effect was evident in November, when Bitcoin reached its peak following earlier monetary policy adjustments. However, with the current slowdown in monetary expansion, Bitcoin has struggled to maintain its previous trajectory, leading to the recent decline.
Technical indicators further corroborate the reasons behind Bitcoin’s price falter. The 10x Research report points to confirmed bearish daily reversal signals, with weekly signals likely to follow. This suggests a potential correction from previously overbought levels. Key support levels have been identified at $89,000 and $75,000, crucial benchmarks that will determine whether Bitcoin can stabilize and regain its upward momentum. The analysts’ assessment of the technical indicators suggests a potential period of consolidation ahead.
On-chain metrics provide additional insights into the selling pressure. The realized profit-loss ratio and shifts in long-term holder positions reveal an increase in selling activity by experienced investors. The report notes that a significant shift in sentiment will only occur when this ratio reverses, indicating a reduction in profitable coin sales by long-term holders. This suggests that the current selling pressure may ease in the near future, paving the way for price consolidation and subsequent recovery.
Looking ahead, the 10x Research report offers a cautiously optimistic outlook for Bitcoin. While December has historically shown bullish trends for Bitcoin, the analysts focus on the broader 2025 outlook. This long-term perspective is supported by Bitcoin’s historical cyclical behavior, which suggests a continued bullish outlook for 2025. The convergence of cyclical trends and potential macroeconomic shifts positions Bitcoin for another strong performance in the coming years. This makes for an intriguing narrative to monitor as we move into 2024 and beyond.
