Bitcoin, the world’s largest and most well-known cryptocurrency, has been facing a bumpy ride in the market recently, with a steep drop in its value over the past week. Despite this downturn, however, there are still optimistic voices predicting that Bitcoin could surge to new heights, with one notable expert forecasting that it may surpass $110,000 in 2025.
Bitcoin’s recent performance has been far from stellar. Over the past week, the cryptocurrency has shed about 12% of its value, with its price falling to a low of $74,000. This marks a significant decline from its all-time high (ATH) of $109.5K, which was reached just a few months ago. The ongoing struggles are attributed to a mix of macroeconomic factors, including uncertainties around potential tariffs and the broader financial landscape under former President Trump’s influence.
This 30% drawdown from Bitcoin’s ATH has led many traders and investors to adopt a more cautious approach. The short-term outlook is currently dominated by bearish sentiment, as evidenced by the surge in demand for put options, which bet on a further decline in price. However, amid these concerns, there is still hope on the horizon for Bitcoin enthusiasts.
Quinn Thompson, the founder of Lekker Capital, a prominent crypto hedge fund, is one of the few voices that remain optimistic about Bitcoin’s long-term prospects. Thompson has made a bold prediction that Bitcoin could exceed its previous ATH and reach a price of over $110,000 in 2025.
Thompson has earned some credibility in the market due to his accurate predictions in the past. Notably, he had correctly forecasted former President Trump’s victory in the 2024 election, as well as Bitcoin’s rise to $100K in the summer of 2024. He also anticipated the recent correction to the low $80K range for Bitcoin, which has played out in recent months.
Building on his track record, Thompson is now confident that Bitcoin’s future looks bright in the mid to long term. According to him, a potential macroeconomic shift could trigger a bullish rally for Bitcoin. He specifically points to upcoming tax cuts and deregulation as potential catalysts for the cryptocurrency’s upward movement.
Thompson’s perspective is particularly intriguing given the current climate of uncertainty surrounding global markets. Despite Bitcoin’s price fluctuations in the short term, he believes the crypto asset has the potential to reach new heights by 2025.
While the future may seem promising for Bitcoin in the eyes of some experts, the present moment tells a different story. Traders are wary about Bitcoin’s immediate prospects, as the cryptocurrency continues to experience significant volatility. Kelly Greer of Crucible Capital pointed out that options traders are heavily hedging against further downside risks, with a notable surge in demand for puts, or bearish bets.
Greer observed, “Protection is the most in demand it’s been in 12 months across maturities, most pronounced in 1 week. Gamma is peak negative – will exacerbate volatility.” This suggests that the market is anticipating more short-term price fluctuations, and the demand for protective measures is at its highest level in nearly a year. This could result in increased volatility in the coming weeks or months, which may deter some investors from making bullish moves just yet.
Options traders play a crucial role in shaping market sentiment, and the current demand for puts paints a bleak picture for Bitcoin in the short term. The Skew Delta 25 indicator, which tracks the demand for puts versus calls (bullish bets), has shown that negative sentiment is currently dominating the market. When the indicator shows negative readings, it typically signals that investors are more inclined to bet on price declines rather than rises.
Greg Magadini, an expert from Amberdata, also noted that the premium for puts is particularly high for short-dated options. “Short-dated options have seen even more puts premium… I think opportunity favors crypto shorts (the laggard theory) as opposed to longs right now (the safe haven theory),” Magadini explained. This indicates that short sellers are currently better positioned for gains in the near term, while those betting on Bitcoin’s price increase might face greater risks.
From a valuation standpoint, Bitcoin’s future trajectory is also a subject of debate. Some valuation models, such as the realized cap, have shown that Bitcoin might be entering a bear market. This could suggest that its price may continue to struggle in the short term. However, not all valuation metrics tell the same story. The MVRV-Z score, another popular model for assessing Bitcoin’s value, recently indicated that Bitcoin might be relatively undervalued at its current price levels.
The MVRV-Z score is used to measure whether Bitcoin is overbought or oversold relative to its long-term average price. According to the model, Bitcoin is currently cooling off from a recent peak, and its price could be approaching a more attractive entry point for investors. This divergence between different valuation models adds another layer of uncertainty to the market’s outlook, with some indicators suggesting that Bitcoin may be poised for a recovery, while others signal the potential for further declines.
In conclusion, while Bitcoin’s short-term outlook remains clouded by volatility and bearish sentiment, there are still significant reasons to believe that the cryptocurrency could make a strong recovery in the coming years. Quinn Thompson’s prediction of Bitcoin surpassing $110K by 2025 reflects a broader belief in the cryptocurrency’s long-term potential, driven by macroeconomic changes and its growing adoption.
However, the cautious positioning of traders and the mixed signals from various valuation models suggest that Bitcoin may face further challenges before it can achieve those lofty price targets. As always, the cryptocurrency market remains unpredictable, and investors will need to carefully navigate the risks and opportunities that lie ahead.
Steven is an explorer by heart – both in the physical and the digital realm. A traveler, Steven continues to visit new places throughout the year in the physical world, while in the digital realm has been instrumental in a number of Kickstarter projects. Technology attracts Steven and through his business acumen has gained financial profits as well as fame in his business niche. Send a tip to: 0x200294f120Cd883DE8f565a5D0C9a1EE4FB1b4E9
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