What’s Next for Bitcoin After the Liquidation? New Highs Unlikely in 2025, Catalyst Lies in Next Fed Chair, Says Analysts

TradingKey - Bitcoin crashed below its 100-day moving average this week, while spot Ethereum ETFs saw their largest weekly outflow on record, signaling that the crypto market is undergoing a broad deleveraging and liquidation wave following the Federal Reserve’s rate cut. Some analysts believe Bitcoin is unlikely to reach new all-time highs in 2025, with the next major bull catalyst hinging on the appointment of the next Federal Reserve Chair.

As of September 28, Bitcoin remains trading below $110,000, down over 5% in the past seven days; Ethereum hovers around $4,000, down more than 10%; and major altcoins like Solana, Dogecoin, ADA, and HYPE have each fallen at least 13%.

Bitcoin Price Chart, Source: TradingKey

Since mid-September, amid the Fed’s first rate cut in nine months, volatile macro conditions, growing skepticism about the sustainability of corporate crypto treasury strategies, and a lack of new catalysts in the crypto space, Bitcoin has traded below its all-time high, and the Crypto Fear & Greed Index has gradually declined. The index dropped sharply from a neutral level of around 45 at the start of the week to 28, indicating signs of market fear.

Bitcoin breaking below the 100-day MA and dropping under $110,000, along with Ethereum falling below $4,000, has sparked debate over market deleveraging and weakening momentum. Data shows that over $3 billion in long positions were liquidated across crypto exchanges during the week.

FalconX noted that Monday’s liquidation wave left most traders “off balance.” After the initial sell-off, traders shifted to defensive hedging strategies. Deleveraging in futures markets was evident early in the week, while large-scale bearish options buying continued mid-week.

Crypto research platform DYOR argued that once the first wave of liquidations began, algorithmic trading and funding pressures turned it into a feedback loop. It wasn’t a fundamental collapse — but rather a system-wide clearing of excessive risk.

Goldman Sachs trader Paolo Schiavone said Monday’s (September 22) Bitcoin crash could be the “first signal” of a market shift — marking the slowdown of the previous three weeks’ risk-on rally.

Schiavone noted that while the selloff may reflect month-end positioning effects, markets remain overextended given ongoing constraints — including high macro volatility and pressure on trades like shorting the dollar and steepening the yield curve.

However, Wincent, a market maker, called this a “healthy correction,” noting no signs of panic or a sharp rise in volatility.

He added that near-term pressure could keep prices lower, especially as crypto has become more sensitive to macro sentiment than earlier this year. As such, he questions whether cryptocurrencies can reclaim all-time highs in 2025.

The Real Bull Catalyst: The Next Fed Chair

Mike Novogratz, CEO of Galaxy Digital, said in a Friday interview that if the successor to Fed Chair Jerome Powell is “exceptionally dovish,” it could trigger a major surge in Bitcoin and other cryptos — potentially becoming the biggest bull catalyst yet.

In recent weeks, President Donald Trump and Treasury Secretary Scott Bessent have revealed they are already holding talks with candidates for the next Fed Chair. The administration has repeatedly signaled a preference for someone open to further rate cuts, possibly including Waller, Bowman, Warsh, or Hassett.

Novogratz said that if Trump follows through on his pledge to appoint “a dove”, we could see a weaker dollar, a gold explosion, and a Bitcoin blow-off top — potentially surging to $200,000.