Daily Crypto Signals: Bitcoin Faces Headwinds as Galaxy Slashes Price Target, Ethereum Eyes $7B Short Squeeze Potential
Galaxy Digital has cut its 2025 Bitcoin price forecast from $185,000 to $120,000, citing institutional maturity, whale selling pressure, and
Quick overview
- Galaxy Digital has reduced its 2025 Bitcoin price forecast from $185,000 to $120,000 due to institutional maturity and significant selling pressure.
- Ethereum's recent drop to $3,055 has resulted in over $1.3 billion in long positions being liquidated, setting the stage for a potential short squeeze.
- Institutional investors are shifting their focus to newer yield-bearing products, as evidenced by the outflows from Bitcoin and Ethereum ETFs.
- Political events, including the White House's support for a pardon of former Binance CEO Changpeng Zhao, are influencing market sentiment.
Galaxy Digital has cut its 2025 Bitcoin BTC/USD price forecast from $185,000 to $120,000, citing institutional maturity, whale selling pressure, and the $20 billion October flash crash that damaged bullish momentum. Meanwhile, Ethereum’s ETH/USD drop to $3,055 has cleared $1.3 billion in long positions and set up a potential short squeeze with over $7 billion in short liquidity clustered near $4,000.
Crypto Market Developments
There is a big change happening in the cryptocurrency market as institutional dynamics change how people expect prices to move and how they trade. On Tuesday, spot Bitcoin and Ethereum ETFs saw their fifth straight day of outflows, with Bitcoin ETFs losing $578 million and Ethereum ETFs losing $219 million. However, Solana SOL/USD ETFs went against the trend and saw their sixth straight day of inflows, totaling $14.83 million. The difference shows that institutional investors are moving their money to newer, yield-bearing products as existing crypto leaders continue to endure selling pressure.
This week, political events also affected how people felt about the market. The White House supported President Trump’s pardon of former Binance CEO Changpeng Zhao. Karoline Leavitt, the White House press secretary, said that the decision went through normal procedures with qualified lawyers, even though Trump said in an interview with 60 Minutes that he had “no idea” who Zhao was. Zhao got a pardon after spending four months in jail for not keeping Binance’s Anti-Money Laundering policy up to date. This makes many wonder how the government feels about the crypto business.
Bitcoin Price 2025 Target Slashed From $185,000 to $120,000
Galaxy Digital’s big change to its Bitcoin price goal is a big step forward for the cryptocurrency. Alex Thorn, the head of research at the investment firm, said that whales sold 400,000 BTC in October, capital moved toward gold, AI, and stablecoins, and leveraged liquidations kept happening. Thorn says that the October 10 flash crash, which caused around $20 billion in liquidations in only 24 hours—the biggest such occurrence in crypto history—”materially damaged” the bull trend.
Galaxy still says that Bitcoin is in a “maturity era” marked by institutional absorption, passive flows, and less volatility, even though the revision was negative. Thorn said that if Bitcoin can stay above $100,000, the bull market that has been going on for almost three years will stay in place, even if gains come more slowly in the future. About 33% of Bitcoin’s circulating supply is currently held at a loss, which is the same amount that was last seen in September 2024. But based on past trends, these kinds of phases usually happen when sellers are tired, not when the whole market breaks down. This could be a sign that accumulation is about to happen.
Ethereum Ready for a Short Squeeze Around $4,000?
Ethereum had a big decline this week, going down to $3,055 and taking away more than $1.3 billion in leveraged long bets on exchanges. The move pushed ETH’s weekly drop above 13% and cleared out liquidity from equal lows near $3,400, where a lot of leverage had built up. During this correction, more than $39 million in long positions were closed on Binance alone. This was the biggest single-day liquidation event since October 10. The next big liquidity zone is between $3,000 and $2,800, which are levels that have historically offered long-term structural support.
But the rapid deleveraging has made it possible for a short squeeze to happen. There is currently more than $7 billion in short position liquidity around the $4,000 level, which is causing a big market imbalance. Technical analysis shows a hidden positive divergence on Ethereum’s daily chart. Prices are making lower lows but the Relative Strength Index stays at the same level. This is a pattern that frequently means the trend will change. If Ethereum can stay stable near the $3,000 support level, even a small recovery might set off a chain reaction of liquidations of short positions that are too heavily leveraged. This could speed up a rise toward $4,000 and beyond. CryptoQuant says that in 2025, ETH went through phases of fall, accumulation, markup, and distribution. It may be close to the end of its current corrective phase.
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