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Where will Bitcoin go?
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In the past decade, from 2015 to 2025, the Federal Reserve has gone through a complete cycle of interest rate hikes, rate cuts, rate hikes, and pauses. Looking back on this history, we find that there is an interesting correlation between the turning points of Bitcoin prices and the policy nodes of the Federal Reserve, especially the phenomenon of early reaction of market expectations.
Bitcoin bull peaks often precede the start or acceleration of rate hikes, and the market trades tightening expectations in advance. Bitcoin bear bottoms usually occur in the later stages of rate hikes, during a pause in rate hikes, or before the start of a rate cut cycle. The market looks for the bottom when the most pessimistic or easing expectations emerge. Quantitative easing or extremely rapid rate cuts are important catalysts for bull markets.
Tariff policies and potential upside risks to inflation from geopolitics may force the Federal Reserve to maintain tightening, which may lead to a high interest rate environment throughout the year and continued pressure on market liquidity.
According to Polymarket data, the scenario with the most bets is 3 rate cuts throughout the year, accounting for about 20%. The second most popular scenario is 4 and 5 rate cuts, accounting for 18% and 13.3% respectively, reflecting that some markets are betting on aggressive easing paths. The support rate for only 2 rate cuts, which was the most optimistic scenario at the beginning of the year, has now fallen back to around 13%. Overall, the market has basically reached a consensus that there will be at least 2 rate cuts in 2025, but there are still large differences on whether it will enter a more intensive water release cycle, and expectations have not yet been anchored.
If the market confirms the risk of interest rate hikes, Bitcoin will most likely be under selling pressure in Q2 2025 and beyond. The previous high point may be the final peak of this cycle. Market sentiment will turn pessimistic, and a deep correction may occur, testing the key support below, and even the possibility of a second bottoming out cannot be ruled out.
RISE
INCREASE
IMPROVE
TO THE MOON
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