Since the November election, Bitcoin and other cryptocurrencies have rallied more than 50%, with Bitcoin breaching $100,000 for the first time.
The rally is largely attributed to President-elect Donald Trump’s surprising embrace of Bitcoin, signaling a potential shift in U.S. financial policy.
Trump’s pro-Bitcoin stance, including the rumored plan to establish a U.S. Bitcoin reserve, has electrified crypto markets, pushing Bitcoin’s price well beyond key resistance levels and sparking intense speculation about the future of digital currencies.
The “Normalization” of Bitcoin Led to its Success in 2025.
Over the last year, Bitcoin has had what you could refer to as a “normalization” as the cryptocurrency is now considered a normal investment for individual portfolios.
Years ago, none of the major banks and research firms would pay any credence to the idea that any cryptocurrency could play a productive role in an investor’s portfolio. That view has changed as several Wall Street banking firms include outlooks and analysis on Bitcoin as part of their yearly outlooks.
Tom Lee of Fundstrat Global Advisors forecasted that Bitcoin would hit $100,000 during 2024, an outlook that proved correct in the last month.
Lee has issued his outlook for Bitcoin looking forward to 2025 including a target that would see Bitcoin hit a new record high at $250,000. That gain would represent a 150% return for Bitcoin.
One catalyst that Lee points out when forecasting $250,000 for Bitcoin is the adoption of the cryptocurrency by Main Street investors.
Earlier in 2024, the SEC approved spot-traded Bitcoin exchange traded funds (ETFs). This created a new, easy way for investors to own the cryptocurrency. This offering has resulted in mass investment in Bitcoin of more than $100 billion.
Now, President-elect Trump’s is talking about creating a U.S. Bitcoin Reserve.
Donald Trump is about to free crypto from its chains …
Market analysts believe that such a move could further legitimize Bitcoin in the eyes of institutional investors and accelerate its adoption as a mainstream asset class.
Additionally, the expectation of favorable regulatory policies under Trump’s administration has added fuel to the rally. “The market is pricing in a Bitcoin-friendly White House, and that’s a game changer,” said Marcus Steele, a senior analyst at CryptoWave Capital.
Altcoins are Now Riding the Bitcoin Wave
First things first, the altcoin markets are a far cry from bitcoin. Trading in these cryptocurrencies is often more volatile and can be driven more by technical features and market trends.
My point is that most investors may not have the knowledge to simply “dip” into the altcoin markets. Make certain that you’ve got the proper background and tools, or a professional that has them, before jumping into this more speculative market.
Bitcoin’s meteoric rise has spilled over into the broader cryptocurrency market, lifting altcoins alongside it.
Popular altcoins like Ethereum (ETH), Ripple (XRP), and Solana (SOL) have all posted double-digit gains in the wake of Bitcoin’s surge.
Ethereum has gained traction due to its role as the backbone of decentralized finance (DeFi) and smart contracts, while Solana has benefited from its reputation as a high-performance blockchain.
That said, this rally has not been evenly distributed. Smaller, less established cryptocurrencies have struggled to keep pace, as investors gravitate toward more recognizable and liquid assets.
This divergence underscores the growing maturity of the cryptocurrency market, where investors are increasingly discerning about which projects have long-term viability.
Are We Entering Euphoria?
While the optimism surrounding Bitcoin and altcoins is palpable, it is something that investors should consider a warning.
The sudden resurgence of Altcoin popularity is no stranger to the cryptocurrency market.
Investors had a sudden love affair with altcoin investing in 2022 as Bitcoin prices had doubled from $30,000 to $60,000. The surge in Bitcoin lured investors into the altcoin assets as they looked for more ways to make money off speculation in the crypto markets.
This was a classic sign of a top in the crypto markets as “Greed” was the driving force behind investor’s shift to altcoins.
And it’s happening again, investors are plunging into the altcoin markets to squeeze even more returns from the trend in cryptocurrencies.
“There’s no denying the excitement in the market right now, but investors need to exercise caution,” warned Julia Kim, a crypto strategist at Apex Investments. “When retail traders start piling in en masse and valuations become disconnected from reality, that’s often a sign of a market top.”
What Investors Should Expect, Wait… then A Run Higher
Bitcoin is in the process of consolidating near it’s all-time highs, that’s a good thing.
A healthy correction at the top of its range would allow the cryptocurrency market to blow off some of the froth that has built over the last two months in preparation for Bitcoin’s next surge.
Bitcoin just crossed $100,000 … how high will it go?
From a technical perspective, investors should maintain a close eye on two prices.
First, $90,000. This price is likely to be the lower level of the trading range for Bitcoin over the next month.
Round numbers often lead to support and resistance. Note the resistance that $70,000 provided for Bitcoin during its 2024 trading, service as the high for Bitcoin the majority of month of this year. Once broken, Bitcoin quickly rallied to $100,000.
Expect to see strength at $90,000, but the price is a double-edged sword.
A break below this price may spook investors and as already mentioned, Bitcoin and other cryptocurrencies are trading their highest level of euphoria in years.
A break back above $100,000 after a strong consolidation will signal that Bitcoin is set to march higher. The next likely target will be $125,000 followed by $150,000.
Expect the volatility to slow while a more deliberate trend develops in 2025 because of the increased capital entering the Bitcoin market from the growth in popularity.
— Chris Johnson
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Source: Money Morning