Essentially, BTC and crypto prices are down on January 7th, 2025, because of two reasons. The US Dollar and Yields remains very strong. Both are restricting momentum in BTC and crypto markets.
While it’s no fun to see the price of Bitcoin drop 8% in 24 hours, it is an inevitable situation.
Here are the 2 reasons why the price of Bitcoin is dropping, and why crypto prices are down. Moreover, there is a psychological effect ($100k) at play combined with sentiment (overly bullish) which we explain as well.
RELATED – 15 crypto forecasts for 2025
Long term, we remain bullish as explained in our latest Bitcoin price prediction research. Short term, BTC is clearly vulnerable as the market can clearly see that $100,000 provides too much resistance.
Bitcoin price down: It’s psychology and emotions
The price of Bitcoin hit a local top at $100k on January 7th, 2025.
Why do we emphasize the price and time?
Because it was not expected for BTC to clear $100k in a low momentum time period.
In fact, it would have been surprising, very surprising, if BTC would continue moving higher in a low momentum period. That’s how we combine time and price analysis to understand when big moves may arise in crypto, both up and down, as per our proprietary methodology.
This is what we wrote in our premium research service, once week ago, when BTC was approaching $100k:
In terms of price, the most bullish outcome will be that BTC drops to $91.5k, holds that level by Jan 15th, starts improving as of that day.
We also wrote:
Our timeline analysis suggests that the highest intensity period of the year will be [date] until mid-March. We believe that it will be a bullish period for crypto and the confirmation should come around Jan 15th, 2025. That’s 3 weeks before the 25% Fibonacci point on Bitcoin’s timeline.
The BTC chart confirmed our timeline readings published in the restricted research area one week ago:
- BTC could not clear $100k in a low momentum time window (Jan 7th, 2025).
- The rejection candle on Jan 7th will require at least one to two weeks to recover.
- There is a rising trendline that originates in Sept 2024, crossing the important $91.5k mark on Jan 25th.
All the points above are crucial to understand if February will be bullish or not – please read Can Bitcoin (BTC) Break Through $100k In January 2025?
USD up, Yields up, Bitcoin price down
The second reason why the Bitcoin price is down has to do with USD strength combined with Yields strength:
Morning Bid: Strong dollar, rising yields hog the spotlight
Dollar strengthens as solid U.S. data pushes up bond yields
The USD remains very strong. That’s too much strength for BTC to stay strong. A Bitcoin price drop is the logic outcome.
Similarly, Yields remain very strong. Hopefully they will hit resistance at the gap created on Nov 1st, 2023! If so, it will alleviate some pressure on crypto markets.
Conclusion – Only if Yields and the USD find resistance around current levels will it stop Bitcoin and crypto markets from dropping.
Bitcoin price down: a psychological level + sentiment
Another aspect that plays an important role is the importance of the $100,000 level.
It’s a psychologically very, very important level.
In fact, the $100k level is the point from where accelerated moves start, in both directions.
What was really concerning? The overly bullish sentiment of investors.
As we run a crypto research service, the first in the world of its kind since 2017, connected to hundreds of investors worldwide, we have a good handle on sentiment. We observed overly bullish sentiment, a disbelief that our prediction of a local top would come true. It’s the ultimate contrarian confirmation that even our readers doubt our not-so-bullish prediction.
Both points combined were concerning to us, when plotting this to the chart we found enough evidence to call for a BTC price drop – which materialized on Jan 7th, 2025.
What’s next for Bitcoin?
While it insightful to understand what happened in the past (“Bitcoin price dropping – what happened“), it is more important to understand what it means for the future.
What’s next for Bitcoin?
Frankly, we believe it will be choppy for BTC and crypto markets:
- For at least a few more weeks.
- With January 15th acting as a ‘line in the sand’ date.
Bitcoin, similar to altcoins, need to prove strength in the period Jan 15th – 25th, 2025.
More about all this in our latest alert, how we derive these dates, and which tokens are top of our watch list!
If anything, Bitcoin seasonality suggests that February is a great month for BTC, so January might be a BUY THE DIP month: Bitcoin Seasonality Charts: Buy The Dip Underway?
Read our recent premium alerts in the restricted research area (log in required):
- Jan 15th, 2025: A Decisive Date for Crypto + Key Insights on 3 Tokens (Jan 5th)
- 7 Must-Read Tips for Success in 2025 (Dec 28th)
- When To ‘Buy The Dip’ In Crypto? (Dec 23d)
We will guide our premium members towards the next BUY THE DIP opportunity.
