Bitcoin Rally Lost Momentum: What Will Happen Next? Analyst Evaluated

Bitcoin closed 2024 with a high figure and after reaching $107,000 in mid-December, breaking a record, it pulled back to around $96,000 in the early days of 2025.

Despite this drop, the remarkable rise of BTC last year has made many investors wonder what will happen in the future.

BlackRock's iShares Bitcoin Trust ETF (IBIT) experienced its biggest outflow since its launch, with a $333 million exit on Thursday. Some attribute these outflows to tax-related adjustments or profit-taking, while others see it as part of a broader slowdown in market momentum.

CoinDesk Indexes General Manager Andy Baehr said in an interview with Morning Brief that "Crypto tends to move in momentum cycles with quieter stages after periods of rapid growth." Baehr highlighted two important periods for Bitcoin's performance in 2024: a rally caused by ETFs in the first quarter and another increase between September and December due to FED meetings and the US presidential elections.

Baehr, who emphasizes the importance of long-term thinking for crypto investors, said, “We should be patient in quiet times and excited in big moments.”

Baehr noted that Bitcoin, while celebrating the 16th anniversary of the Genesis Block, is still in its infancy compared to traditional financial instruments, directing attention to four key areas driving adoption momentum:

• State Reserves - Governments that include Bitcoin in strategic reserves.
• Corporate Use Cases - Increasing interest of large companies.
• Corporate Investments - Gradual participation of pension funds and insurance companies.
• Consulting and Individual Participation – More extensive education and adoption in financial advisory services.

Baehr said that the adoption momentum is expected to support the medium and long-term price stability of Bitcoin and gradually reduce its famous volatility.

Regulation continues to be a significant factor for the crypto market. While Bitcoin itself operates under a relatively robust framework with futures, ETFs, and options, stablecoins are expected to attract significant attention this year. Baehr said, "If stablecoin regulation passes, these tokens will need blockchain to trade, further increasing the usage of platforms like Ethereum and other Layer 1 solutions."

Although the momentum of Bitcoin has decreased since December, the next rally may be just around the corner. Baehr said, "When the momentum returns, we are sure there will be a widespread rally in the crypto market."