Bitcoin (BTC) rally in Q1 2025 to be triggered by money printing by the US Fed

Bittime - Bitcoin's (BTC) recent price correction was most likely triggered by concerns regarding the US Federal Reserve's tightening monetary policy. Analysts believe that this policy will be the main factor affecting Bitcoin's price movement in 2025.

On January 7, Bitcoin price briefly broke the psychological $100,000 mark before correcting to $92,500. This decline shows how market sentiment can be affected by tight monetary policy.

Ryan Lee, chief analyst at Bitget Research, explains that the decline in Bitcoin price is mainly due to strong US economic data, which points to a potential interest rate hike.

This makes digital assets like Bitcoin less attractive as an investment. With signals from the Federal Reserve indicating tighter monetary policy, the market experienced a significant correction.

Read also: Bitcoin Price Flashback 2016, Much Different from Now!

Impact of the Fed's Monetary Policy

The tight monetary policy of the US Fed can affect the price of Bitcoin in several ways:

Interest Rate Hikes: Rising interest rates can make investing in digital assets less attractive compared to safer, traditional financial instruments.

Market Liquidity: Policy tightening could reduce liquidity in the market, impacting investors' ability to buy Bitcoin.

Market Corrections: Economic uncertainty could lead to the liquidation of long positions in the Bitcoin market, which could exacerbate price declines.

With expectations that interest rates will remain unchanged at the next Federal Reserve meeting, the market currently expects the first lending rate cut to occur on June 18. However, the resilience of the economy shown by the latest data could delay that expectation.

Potential Rally in Q1 2025

Despite concerns about monetary policy tightening, analysts remain optimistic about Bitcoin's potential rally in Q1 2025. Some predictions suggest that Bitcoin price could drop below the $90,000 level before starting a strong rally towards the $126,000 to $128,000 range.

John Glover, Ledn's chief investment officer, stated that wave analysis suggests that Bitcoin may be completing the fourth wave, which could be followed by a significant move upwards.

The analysts also noted that Bitcoin needs to hold above the $91,000 support level to avoid further declines. If Bitcoin can maintain this level, then the potential for a future rally will be even stronger.

Also read: Demand for Bitcoin ETFs Increases Dramatically

Conclusion: Bitcoin's Bright Future

With projections that money printing by the US Fed could attract more investment into Bitcoin, the future of BTC looks bright.

Some analysts have even predicted that the peak cycle of Bitcoin price could reach more than $150,000 by the end of 2025, driven by an increase in the global money supply estimated at $20 trillion.

Bitcoin (BTC) investors should remain vigilant and ready to capitalize on opportunities that arise in this digital asset market. A rally triggered by monetary policy could be a watershed moment for Bitcoin, making it more than just a speculative asset, but an integral part of a global investment strategy.

FAQ

What triggered the Bitcoin (BTC) rally in Q1 2025?

The Bitcoin (BTC) rally in Q1 2025 is predicted to be triggered by money printing by the US Fed. Loose monetary policy and potential interest rate cuts may increase investor interest in Bitcoin as an investment alternative.

How does the Fed's monetary policy affect Bitcoin price?

Tight monetary policy from the Fed, such as interest rate hikes, may make Bitcoin less attractive compared to traditional financial instruments. This can reduce market liquidity and lead to a correction in Bitcoin price.

What is the future projection of Bitcoin price?

Some analysts predict that after the correction, Bitcoin price could rally towards the $126,000 to $128,000 range by 2025. There are also predictions that Bitcoin could reach over $150,000 by the end of that year, driven by an increase in the global money supply.

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References

cointelegraph.com, Bitcoin price dips to $92.5K caused by Fed interest rate concerns: Analyst, accessed on January 9, 2025.

Author: AWW