Current Bitcoin inflows show BTC will hit $249K during Trump’s first year in office

Bitcoin’s price trajectory in 2025 could see unprecedented highs as market dynamics shift under the incoming US Republican government. CryptoQuant, an on-chain analytics platform projects that Bitcoin might reach $249,000 during Donald Trump’s first year back in office.

CryptoQuant’s latest report predicts Bitcoin will be worth at least $145,000 in 2025, with potential highs nearing $250,000. Analysts from the platform attribute this forecast to a possible influx of $520 billion in new capital into the cryptocurrency market.

The projections are buoyed by expectations of favorable macroeconomic and regulatory conditions under the new administration. The appointment of crypto-friendly regulators and potential executive actions could also significantly boost Bitcoin demand.

Expectations of reductions in Federal Reserve interest rates may also create a favorable environment for risk assets like Bitcoin.

Historical trends and metrics prompt bullish forecasts 

Historical trends of capital inflows during previous cycles support CryptoQuant’s prediction. Data shows that if 2025 follows patterns from earlier bull markets, the projected half-trillion-dollar influx is achievable. 

“In the context of positive regulatory shifts and accommodative monetary policy, capital inflows are likely to drive significant growth in Bitcoin’s market cap,” the report noted.

Bitcoin’s valuation metrics also indicate further price appreciation potential. The Market Value to Realized Value (MVRV) ratio currently stands at 2.3, below the overheated threshold of 3.8-4.0. The MVRV levels suggest Bitcoin’s market is not yet in speculative territory, leaving ample room for price growth.

Among other bullish indicators, CryptoQuant’s analysis explained the role of realized market cap, which is the combined value of Bitcoin’s circulating supply as it moves on-chain. 

Historical patterns suggest the $520 billion inflow target aligns with previous market cycles when the network experienced huge growth.

To further support the predictions, Bitcoin investor Lark Davis shared some similarities between BTC’s current price action and previous presidential election cycles. 

During the 2021 presidential election, BTC surged from $13,594 to a high of $42,136 before correcting to $30,466 ahead of Joe Biden’s inauguration. Following the former US Democratic party leader’s swearing-in ceremony, the asset rallied to $65,000.

“Bitcoin is repeating similar price action as the last presidential election and inauguration. While history may not repeat itself, it often rhymes,” Davis noted.

Risks to BTC’s price climb

While the current market outlook is more optimistic, some outcomes could still hinder BTC’s climb. Economists believe there could be delayed interest rate cuts this year due to persistent inflation or muted retail investor participation. This might dampen the broader crypto market’s bullish sentiment. 

Additionally, a potential “sell-the-news” effect following Trump’s inauguration could trigger short-term profit-taking, which may heighten market volatility and break Bitcoin’s uptrend.

Market analyst Filbfilb noted ongoing bearish sentiment across risk assets, driven by concerns over Federal Reserve policy, which could temporarily weigh on BTC’s performance. 

On his Telegram channel, he described the cryptocurrency as a “beach ball under water” restrained by legacy markets. However, it noted that it is primed for a rebound.

BTC recently rebounded to hover near $97,000 after a correction phase. Short-term analysis using the Spent Output Profit Ratio (SOPR) reveals a pattern of recovery following recent corrections. The SOPR shifted from red to green circles during these phases, signaling dampened optimism before a market rally.

Compared to earlier corrections, the current profit-taking volume remains significantly lower. This suggests a shorter correction period, potentially paving the way for an upward trend by the end of Q1 2025. However, analysts caution that one or two sharp drops could still occur before sustained recovery.

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