Bitcoin's Price Increase Momentum Lost: What Will Happen Next?

Bitcoin closes 2024 at a high level, reaching a record level of $107,000 in mid-December before dropping to around $96,000 at the beginning of 2025. Despite this decline, the significant increase in BTC over the past year has left many investors wondering what will happen next. BlackRock’s iShares Bitcoin Trust (IBIT) ETF has seen its largest outflow since its launch on Thursday, with $333 million. Some believe the outflow is due to tax adjustments or profit-taking, while others see it as part of a broader market pause. “Cryptocurrencies tend to move in cyclical momentum, with periods of rapid growth followed by slower periods,” Andy Baehr, Director of Indices at CoinDesk, shared with Morning Brief. Highlighting Bitcoin’s performance in 2024, Baehr pointed out two main phases: a price increase due to ETF momentum in the first quarter and another surge from September to December, driven by Federal Reserve meetings and the US presidential election. According to Baehr, it is important for cryptocurrency investors to think long term, “We should be patient during quiet times and excited during important moments.” When Bitcoin celebrates 16 years of the Genesis Block, Baehr notes that this asset is still in its early stages compared to traditional financial instruments. Baehr has highlighted four main areas driving its application momentum: Government reserves - The government puts Bitcoin into strategic reserves. Business use cases - Increasing interest from large corporations. Institutional investment - Gradual participation of pension funds and insurance companies. Personal advice and commitment - More extensive education and application of financial advisory services. Baehr said this applied incentive is expected to support the medium and long-term price stability of Bitcoin and gradually reduce the notorious volatility of this currency. Regulation continues to be a crucial factor for the cryptocurrency market. While Bitcoin itself operates within a relatively robust framework with futures contracts, ETFs, and options, stablecoins are expected to gain significant traction this year. ‘If regulations on stablecoins are passed, these tokens will require blockchain for transactions, further expanding the utility of platforms such as Ethereum and other layer 1 solutions,’ Baehr said. While Bitcoin’s upward momentum has slowed since December, the next price surge may be imminent. “When the upward trend resumes, we believe this will be a widespread price surge in the cryptocurrency market,” Baehr said.

DYOR! #Write2Earn #Write&Earn $BTC {spot}(BTCUSDT)