Forward Guidance Newsletter Segment

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There was no shortage of crypto price predictions this year, particularly in November and December after the election. Some had been eyeing the $125,000 level for BTC at the end of 2024, while others warned of a pullback.

Current Market Status

As of 2:10 PM ET Monday:
– BTC at ~$94,300
– ETH at ~$3,400

Bitcoin has dropped roughly 12% since rising above $108,000 on December 17. Ether was trading above the $4,000 mark that day but has fallen 15% since.

Factors Influencing Price Changes

21Shares research strategist Matt Mena attributed part of this decline to the more hawkish vibes from the Fed heading into 2025. He noted that the forecast of two rate cuts next year (instead of three) “dampened market sentiment and is a key factor behind the recent downturn in prices for BTC, ETH, and other risk assets.”

Mena also mentioned that the six-month high in the 10-year Treasury yield further diminishes the appeal of crypto assets, as investors shift toward safer and more predictable returns.

Additionally, some investors are locking in gains from the year, while others employ tax-loss harvesting strategies — selling assets that have declined in value to offset capital gains and reduce taxable income.

Analysts describe the current phase as a “healthy” correction, typical for bitcoin after significant run-ups. If BTC can stay above $85,000, Mena believes it can sustain the recent uptrend. Otherwise, we might see accelerated selling and further price declines.

Mena points out, “The next major psychological price level to watch is $110,000. Once bitcoin breaks through this resistance, we could see a swift surge to $120,000, with the potential to target $150,000 by the summer as momentum builds.”

Opinions on Future Market Trends

Sergei Gorev, head of risk at YouHodler, anticipates the corrective sentiment in the crypto market will continue into 2025, citing the historical correlation between BTC and the declining M2 money supply.

On the other hand, Galaxy’s Alex Thorn wrote in a research note that he expects BTC to ultimately reach 20% of gold’s market capitalization in 2025 (currently slightly above 10%). Thorn believes BTC will cross $150,000 in the first half of the year and may reach a “test or best” of $185,000 in Q4.

“A combination of institutional, corporate, and nation-state adoption will propel bitcoin to new heights in 2025,” Thorn stated. “Throughout its existence, bitcoin has appreciated faster than all other asset classes, particularly the S&P 500 and gold, and that trend will continue in 2025.”