Bitcoin Retreats Below $98K as Market Weighs Economic Data and Institutional Adoption
Bitcoin (BTC) experienced significant volatility in the first week of 2025, briefly touching $102,180 before retreating below the psychological $98,000 level amid stronger-than-expected U.S. economic data.
The pullback triggered nearly $300 million in long-position liquidations, marking the year’s first major leverage flush.
Fed Rate Cut Hopes Dip
Two important economic reports exceeding analyst estimates were the main causes of the downturn in the bitcoin market. While December’s ISM Services PMI hit 54.1 with a significantly high Prices Paid subindex of 64.4, November’s JOLTs job vacancies climbed to 8.1 million. Strong economic data sent U.S. Treasury yields higher; the 10-year yield rose to 4.68%.
The strong data has fundamentally changed rate cut expectations; investors now price in just one 25-basis-point annual decrease for the whole year. From almost fifty percent a week ago, the likelihood of a March rate cut has dropped to 37%.
Institutional Investors and Nation-State Adoption of Bitcoin
With a positive view for 2025, Fidelity Digital Assets emphasizes expected nation-state adoption as a main engine of growth. Research analyst Matt Hogan said nations might start covertly building Bitcoin reserves, especially if the US moves on with its strategic reserve plans.
BTC Exchange Flows and Investor Analysis
Recent figures reveal notable institutional involvement; Binance notes its greatest monthly outflow—5,407 BTC. Turning positive in 2025, the Coinbase premium index points to increased retail buying activity among American citizens.
BTC/USD Technical Analysis
Though there has been a recent retreat, multiple technical indicators point to underlying strength in the structure of Bitcoin. Bitfinex analysis shows that the sell-side liquidity of Bitcoin BTC/USD is fast declining; the liquidity inventory ratio dropped from 41 months in October 2024 to about 6.5 months right now. Usually, this dynamic of constrained supply causes increasing pricing pressure.
Key technical levels to watch include:
- Support: $97,000-$98,000 zone
- Critical resistance: Previous high at $102,180
- Equal lows (potential bounce areas): $97,377 and $96,700
Bitcoin Price Forecast
If Bitcoin keeps support above $97,000-$98,000, based on present market dynamics and institutional analysis it seems positioned for continuous upward momentum. While Bitfinex analysts have established minimum price estimations of $145,000 by mid-2025, with the chance of hitting $200,000 under good conditions, Fidelity’s analysis points to significant growth potential.
