Bitcoin Faces Macro Challenges Amid Market Adjustments

According to BlockBeats, Bitwise released its January 2025 Bitcoin Macro Investor Report on January 7, highlighting several macroeconomic challenges facing the cryptocurrency market in December 2024. These include profit-taking, reduced institutional exposure, a strengthening U.S. dollar, and Federal Reserve policy adjustments leading to tighter financial conditions. Despite these short-term risks, Bitcoin continues to receive support from on-chain data. The report suggests that while there are immediate challenges, long-term positive factors such as Bitcoin halving and strategic reserves are expected to drive significant price appreciation. It is anticipated that Bitcoin will outperform traditional assets in 2025 and beyond. Although the Federal Reserve cut interest rates by 25 basis points in its December meeting, it indicated that future rates might be higher than previously expected. Global liquidity reduction and a stronger dollar are exerting pressure on Bitcoin, which remains correlated with traditional markets like the S&P 500. On the blockchain side, demand from ETFs, corporate treasuries, and retail investors is creating a supply gap for Bitcoin. While some on-chain activities have cooled, key indicators such as declining exchange balances and rising hash rates demonstrate the market's continued resilience.