Bitcoin’s price has recently dipped below the $100,000 mark, a level it had maintained since January 27. This decline is attributed to rising inflation concerns following the imposition of import tariffs by President Donald Trump on goods from China, Canada, and Mexico.
Ryan Lee, chief analyst at Bitget Research, suggests that this downturn might precede a more significant correction, potentially bringing Bitcoin’s value down to $95,000. He stated, “On the downside, the $95,000 range remains a critical support area. The interplay between labor market trends, Fed policy expectations, and market sentiment will be the main catalysts to monitor in the coming weeks.”
The upcoming U.S. labor market report, scheduled for release on February 7 by the Bureau of Labor Statistics, is anticipated to play a pivotal role in Bitcoin’s near-term trajectory. Lee noted that weakening labor market data could bolster the case for a Federal Reserve rate cut, potentially creating a “more supportive environment for Bitcoin.”
Despite the recent dip, Bitcoin achieved a historic milestone by closing January above $102,000, marking its first monthly close above the $100,000 threshold. This represents a more than 6% increase from its previous record monthly close of $96,441 in November 2024.
Some market analysts interpret the current downturn as a potential “bear trap,” a scenario where a temporary decline in an asset’s price during a long-term uptrend leads investors to mistakenly believe a bear market has begun. This perspective suggests that the recent correction could be a coordinated effort to induce selling before a subsequent price increase.
Looking ahead, Bitcoin’s prospects for 2025 remain optimistic. The recent surpassing of a $125 billion milestone by spot Bitcoin exchange-traded funds (ETFs) in the U.S., just over a year after their debut in January 2024, underscores growing institutional interest. Analyst forecasts for Bitcoin’s value by the end of 2025 range from $160,000 to over $180,000.
In summary, while Bitcoin faces short-term challenges influenced by macroeconomic factors and market dynamics, its long-term outlook remains positive, supported by increasing institutional adoption and favorable market sentiment.
