Bitcoin Price Today: Will BTC Recover After 2025’s First Crash?

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Following a peak of $102,702 on Tuesday, Bitcoin (BTC) plummeted by 5.16% in just one day. The downward trend persisted into Wednesday, resulting in an extra 5.16% drop, causing ripples throughout the cryptocurrency market. As of now, Bitcoin is currently trading at a level not seen since yesterday, marking its first major decline in 2025.

Has this recent drop in value caused investors to ponder if we’re seeing the beginning of a significant market adjustment, or if Bitcoin could bounce back swiftly. So, what might be the forecast for Bitcoin’s price by January 2025? Let’s delve into it.

Bitcoin Price Today: Explaining BTC’s First Crash of 2025

Here are four reasons why Bitcoin crashed on January 7.

  1. According to VeloData, Bitcoin’s Open Interest slumped by nearly $1B from January 6, 16:00 UTC, to January 7, 09:00 UTC, while the price moved sideways. This divergence denotes that investors were closing positions.
  2. After clearing the $100K hurdle and ending its 11-day consolidation, Bitcoin entered a sell-side imbalance, extending from roughly $102K to $105K. 
  3. With a spike in the US 10-year treasury yields, investors are concerned about stagflation amid the macroeconomic outlook.
  4. Despite revisiting the $100K psychological level, BTC did not set up a higher high to flip the market structure bullish. Hence, profit-taking and bearish sentiment could be the fourth reason why Bitcoin collapsed.

Having grasped the reasons behind Bitcoin’s drop, let’s now examine crucial support levels and potential milestones that might be reached by January 2025.

Strategic Price Targets For January 2025?

Important areas where support might be found are the CME Gap stretching from approximately $94,970 to $94,495, the lower end of the Value Area at $93,299 and also $92,266 and $90,835. It’s crucial for investors to keep an eye out for signs suggesting a potential reversal at these points.

As an analyst, I’m suggesting that moving into any of these levels presents a potential opportunity for accumulation. A bounce from this point is likely and could propel Bitcoin back towards the high-probability target of $100K, possibly even reaching the upper limit of the sell-side imbalance at $105K. However, before January 2025 comes to an end, a correction to around $90K may occur, followed by another bullish test of the $105K level.

Looking ahead, the forecast suggests that the all-time high (ATH) for Bitcoin might occur around the 161.8% Fibonacci level, which translates to approximately $118,467.4.

Trump’s Inauguration Could Catalyze Rally

The win of Donald Trump in the 2024 U.S. Presidential Elections led to increased market volatility and optimism, which boosted both cryptocurrencies and American stocks. This suggests that the inauguration of President-elect Donald Trump on January 20 may further drive up Bitcoin’s value. However, investors should remain patient as there could be periods of sideways movement or consolidation before this event.

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2025-01-08 16:09