After hitting a local top of $102,702 on Tuesday, Bitcoin (BTC) crashed 5.16% in a single day. The sell-off continued into Wednesday, with BTC shedding an additional No data found for bitcoin on 46 minutes ago%, sending shockwaves across the crypto market. As of today, Bitcoin is trading at No data found for bitcoin on 46 minutes ago, marking its first significant crash in 2025.
This sudden downturn has left investors questioning whether this is the start of a steep correction or if BTC could recover quickly. What’s next for BTC price in January 2025? Let’s explore.
Bitcoin Price Today: Explaining BTC’s First Crash of 2025
Here are four reasons why Bitcoin crashed on January 7.
According to VeloData, Bitcoin’s Open Interest slumped by nearly $1B from January 6, 16:00 UTC, to January 7, 09:00 UTC, while the price moved sideways. This divergence denotes that investors were closing positions.
After clearing the $100K hurdle and ending its 11-day consolidation, Bitcoin entered a sell-side imbalance, extending from roughly $102K to $105K.
With a spike in the US 10-year treasury yields, investors are concerned about stagflation amid the macroeconomic outlook.
Despite revisiting the $100K psychological level, BTC did not set up a higher high to flip the market structure bullish. Hence, profit-taking and bearish sentiment could be the fourth reason why Bitcoin collapsed.
BTCUSDT Vs. Open Interest vs. Liquidations
After understanding why Bitcoin crashed, let’s look at key support levels and targets that could be achieved in January 2025.
Strategic Price Targets For January 2025?
The key support levels include the CME Gap, extending from $94,970 to $94,495, the value area low of $93,299, $92,266, and $90,835. Investors need to watch out for reversal signs at these levels.
A move into any of these levels could provide an opportunity to accumulate. A bounce here should be a high-probability scenario and could push Bitcoin to revisit $100K and deep into the sell-side imbalance’s upper limit of $105K. Before the end of January 2025, traders can expect a correction to $90K, followed by a bullish retest of $105K.
From a long-term perspective, Bitcoin price prediction hints next ATH could be at the 161.8% Fibonacci level at $118,467.4.
BTC/USDT 4-hour chart
Trump’s Inauguration Could Catalyze Rally
Donald Trump’s victory in the 2024 US Presidential Elections caused a spike in volatility and bullish momentum that pushed both cryptos and US equities higher. Hence, the upcoming inauguration of President-elect Donald Trump on January 20 could propel Bitcoin higher. Investors need to be patient until this event, as there might be consolidation or rangebound movement until then.
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