After returning above $100,000 on January 7th, Bitcoin has fallen from around $102,000 to a low of $92,500 on the 9th, against the backdrop of weakening expectations for the Federal Reserve to cut interest rates this year.
Faced with various uncertainties such as the Federal Reserve's limited interest rate cut expectations, the potential trade war and tax cut policies that may be launched by the new Trump administration, the current market institutions and analysts do not have a consistent view on the future direction of Bitcoin. This article will summarize the current market perspectives for readers.
Matrixport: Bitcoin is expected to enter a consolidation phase in the near future
The cryptocurrency financial services platform posted on social media platform X yesterday stating that with the inauguration of Trump, the global liquidity denominated in US dollars is beginning to tighten, which may lead Bitcoin to enter a consolidation phase:
Volatility in global liquidity may put some pressure on Bitcoin. Historical data shows that changes in liquidity usually lead the price trend of Bitcoin by about 13 weeks. With the strengthening of the US dollar after Trump's inauguration, the global liquidity denominated in US dollars is beginning to tighten, suggesting that Bitcoin may enter a consolidation phase in the near future.
However, Matrixport also added that this consolidation may be temporary, as Bitcoin still exhibits positive long-term potential from a long-term perspective.
Bitwise: The correlation between Bitcoin and US stocks has rebounded
Andre Dragosch, Head of European Research at asset management firm , pointed out that under the influence of overall economic factors such as the Federal Reserve's reduced interest rate cut expectations, the correlation between Bitcoin and the S&P 500 index has rebounded to 0.88, breaking the divergence trend after Trump's election victory last November.
The consequence of this rebound in correlation is that Bitcoin may face risks in the short term, accompanying the pressure on US stocks from the overall economy.
Analyst: Bitcoin is expected to plummet to $30,000 - $50,000
In contrast to the moderate bearish views, veteran trader Peter Brandt stated that the high leverage used by Bitcoin traders usually, if the market sentiment changes rapidly, is likely to trigger a huge market correction, with Bitcoin potentially experiencing a 50% drop to the $50,000 level.
Furthermore, financial analyst Jacob King pointed out more pessimistically that Bitcoin is facing the resistance model of its 8-year cycle, and he predicts that each time it loses critical support, Bitcoin will experience a major crash, and he expects Bitcoin to return below $30,000 this year.
QCP Capital: The current correction is laying the foundation for an upswing after Trump's inauguration
However, QCP Capital's view is more optimistic. They believe that the recent strong performance of the US job market has unexpectedly stimulated the market's risk aversion sentiment, leading to investors' sell-off of risky assets and a surge in long-term bond yields.
However, QCP stated that the current correction will be temporary, and the market's liquidation is laying the foundation for an upswing after Trump's formal inauguration. Additionally, the key economic event to watch this week is the non-farm payroll data to be released tomorrow evening, which could also have an impact on the volatility of Bitcoin.
