- Trump’s crypto-friendly policies, including the proposed Bitcoin reserve, could shape the 2025 crypto market.
- Persistent inflation and fewer rate cuts in 2025 may challenge Bitcoin’s valuation, as per Fed projections and analyst insights.
- Critical Bitcoin levels: $96K-$97K resistance and $90.5K support, with overbought conditions suggesting possible selling pressure.
Bitcoin’s price has had a dip on Christmas Eve, nearing the close of a volatile year on a cautious note. BTC saw a 2% decline over the last 24 hours, trading at $94,063. The year 2025 could be important for the crypto market, with political, monetary, and market outlook affecting the movement.
Trump’s Pro-Crypto Policies to Influence Market
The market anticipates potential volatility in 2025, fueled by President-elect Donald Trump’s supportive stance on cryptocurrencies. Trump’s proposals, including establishing a strategic Bitcoin reserve, could importantly impact market sentiment.
The Senate’s response to his crypto-friendly nominations will also be a crucial factor for the market. If implemented, these policies may affect cryptocurrencies, supporting their statuses of interest.
Federal Reserve’s Policies
Monetary policies, particularly interest rates, are central to Bitcoin’s valuation. Crypto market analyst Yuya Hasegawa of Bitbank emphasized that monetary easing often supports Bitcoin, while tighter policies exert downward pressure.
What’s the deal with today’s market chaos?
— Ali (@ali_charts) December 18, 2024
The Fed went ahead with a predictable 25 bps rate cut. No surprises there—97% of people expected it. But then, Bitcoin tanked around $100,000. Why? Let me explain without the usual Fed jargon.
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This is a glimpse of the premium… pic.twitter.com/wANPW4t2uV
The Federal Reserve’s recent quarter-point rate cut, a full percentage point reduction this year, may lead to fewer cuts in 2025. However, inflation trends complicate this outlook. Fed projections suggest inflation may persist longer, with the 2025 forecast adjusted upward to 2.5%.
This prolonged inflationary environment may keep interest rates higher for an extended period. Hasegawa noted that high rates not only challenge Bitcoin but also strain government debt management.
Technical Indicators
Data from CryptoRank shows important price levels for Bitcoin based on Fibonacci retracement and momentum analysis. Trading activity shows Bitcoin’s price at $94k. A downward trendline near $96,000-$97,000 points to a critical resistance point, while $90,557.36 remains a pivotal support level.
Momentum indicators, including the Stochastic RSI, suggest overbought conditions, indicating potential selling pressure. Meanwhile, low trading volumes point to market hesitation near current price levels, making breakouts less likely without increased participation.
In addition, resistance levels at $97,353.21 and $99,423.44 align with market patterns, signaling potential recovery zones if momentum shifts positively. On the downside, a breach of $90,557.36 could lead to increased bearish momentum.