Bitcoin’s outlook faces headwinds amid stronger dollar: Matrixport

Analysts warn that Bitcoin could face short-term pressure as tightening global liquidity following Trump’s re-election signals a potential pause in price gains.

Matrixport, Asia’s blockchain analysis center, wrote in a Jan. 8 research note that crypto investors should be prepared for a short-term slowdown as global liquidity tightens.

The tightening comes on the heels of a stronger US dollar following Trump’s re-election, and historically changes in global liquidity tend to impact the Bitcoin (BTC) price after about 13 weeks, according to crypto analyst Markus Thielen. Thielen warns that Bitcoin could enter a consolidation phase as liquidity tightens, noting that this typically happens when dollar-denominated liquidity weakens. Despite the decline, analysts expect this phase to be short-lived.

“The broader outlook for risky assets, particularly Bitcoin, remains constructive,” Thielen says, noting that investors may be more cautious when liquidity indicators are less positive because they have been historically reliable. For now, Bitcoin may face some blows, but the long-term picture remains positive.

The warning came as Bitcoin saw a sharp drop in inflows into spot Bitcoin exchange-traded funds on January 7, following a 5% decline fueled by expectations of a more hawkish Federal Reserve.

As Crypto.news previously reported, BTC fell nearly 6% on January 7; This decline was weighed down by rising US bond yields and investor caution ahead of major economic updates. The rise in bond yields fueled expectations that the Fed would take a tougher stance; officials signaled only two rate cuts in 2025, fewer than expected.