Forex Ninja Trader

Bitcoin Price And Predictions 2025 With an eye on the rearview mirror, we have collated our key bitcoin predictions for 2025 and the road ahead: Bitcoin Price Will Peak at $150k - $200k  A Nation State or U.S. State Will Adopt Bitcoin As A Strategic Reserve AI Agents Will Become Prominent In Bitcoin Trading Bitcoin Price In December 2023 we predicted, as part of the bitcoin price predictions for 2024, that “the bitcoin price would rise to $150k to $200k over the next one to two years”. We are sticking with that prediction. Based on the previous bull runs, the bitcoin price high is 12 to 18 months after the halving event. On that basis, the price high will be in the third quarter of 2025 (August – October). Beyond this point, the 4-year cycle begins to repeat itself, and Bitcoin enters a bearish phase and the crypto winter, a period of extended price decline in the cryptocurrency market. That said, we predict that the structural changes in bitcoin and macro changes linked to the Trump administration will disrupt the “normal” cycle. Bitcoin could peak before the third quarter, or it could peak as late as 2026. Bitcoin Strategic Reserve Trump has indicated that he will create a U.S. Strategic Bitcoin Reserve. However, it's unlikely that the necessary legislation and political consensus will be in place in 2025. At best, it's more likely that Trump will stick with his commitment not to sell the 200,000 bitcoin that the U.S. currently holds. On that basis, the probability of a U.S. Strategic Bitcoin Reserve in 2025 is not high. However, the probability is greater than zero. That said, Brazil has recently introduced a bill to create a bitcoin strategic reserve, and Japan is also considering the same. Argentina is considering making bitcoin legal tender, and Thailand is conducting a study. Others include Russia, Switzerland and the UAE. From a U.S. perspective, the creation of a Strategic Bitcoin Reserve is far more likely to happen at the state level first. Texas, Florida, and Pennsylvania are among ten U.S. states that have already proposed some form of a Bitcoin reserve. AI Agents Trading Bitcoin AI Agents will become prominent in 2025. They are autonomous programs powered by AI that interact with blockchains to perform tasks, make decisions, and optimise outcomes. AI agents enhance predictive analytics by analysing large datasets in real-time. Using historical stock prices, corporate earnings reports, and social media sentiment, they can identify patterns and predict market movements more accurately. AI agents will disrupt traditional markets and will outperform traditional investment vehicles particularly in short term trading. They will manage portfolios in 2025 and form the basis of the new digital age and that of trading.

S&P 500 To Close Out 2024 On A Positive There’s a lot of activity in the S&P 500 currently. Whether it’s rebalancing within investment funds, dark pool activity or options flows, now is a time for retail investors to maintain focus. There are early signs that the Santa rally may have faltered. Over the last three trading sessions, the percentage of stocks that are up has reduced significantly. The percentage of stocks above their individual short—and medium-term moving averages is clearly declining. If the S&P 500 can take back the 50-day and 100-day moving averages at the start of this week, that would be constructive moving into January. A positive Santa rally matters. Statistically, the S&P 500 returns 10% on average in the year following a positive Santa rally. In contrast, the year after a negative Santa rally returns just 5% on average. The dollar remains strong, and the 10-year bond yield remains on an upward trajectory. The Federal Reserve cut interest rates by 100 bps in 2024, and the bond yield has gone up by 100 bps. That divergence is significant. The probability of a 10% pullback in the S&P 500 can’t be ruled out. It’s been more than 420 days since the S&P 500 experienced a pullback of 10%. Statistically, the probability of a pullback in the first or second quarter of 2025 is high. In the last five trading days, technology, financials, healthcare, and semiconductors were among the best performers, with mega-cap stocks (37% of the market) holding up the market. However, market breadth remains weak, and most of the decline in the S&P 500 on Friday was in the mega-cap stocks, with some rotation into defensive stocks. Tomorrow, the S&P 500 opens in positive gamma. The key levels remain unchanged from the start of last week. The gamma flip zone is 5955, the call resistance is 6132, and the put support is 5860. A new low in the S&P 500 this week would not be a good sign. If it sells below the 20-week moving average and 5700, it could cascade further. However, if the S&P 500 remains between 5950 and 6050, that would be a positive outcome for 2024 and a positive sign for trade in January.    

A Review Of Our 2024 Bitcoin Price And Predictions In December 2023, our bitcoin predictions were as follows: Spot Bitcoin ETF Will Be Approved The Price Of Bitcoin Will Hit A New All-Time High In 2024 Publicly Traded Companies Will Adopt Bitcoin In 2024 So, how did we do? Bitcoin ETFs The spot bitcoin ETFs, a significant development in the cryptocurrency market, were approved in January 2024. Historically, they were the most successful ETF launches, with inflows in excess of $30 billion, indicating a growing interest in bitcoin among investors.   In 2025, we anticipate that spot bitcoin ETFs will add a further $40 billion. Bitcoin Price Predictions We predicted that the bitcoin price would be $44k at the launch of the ETFs. The actual price was $46k. We predicted the bitcoin price would be $60k at the halving event. The actual bitcoin price was $63k.      The price of bitcoin did hit an all-time high. We predicted that the high would be $80k. The new all-time high in bitcoin price is 104k. We also predicted (December 2023) that the bitcoin price would rise to $150k to $200k over the next one to two years. Bitcoin Adoption The final prediction was that publicly traded companies would adopt bitcoin. We noted that changes to rules related to cryptocurrency accounting in the U.S. (and effective December 2024) would make it more appealing for publicly traded companies to hold Bitcoin.   At least 32 publicly traded companies have adopted bitcoin this year, compared to nine in 2023, eight in 2022, 20 in 2021, and five in 2020. That doesn’t include companies related to bitcoin mining or digital asset management. That trend will continue in 2025. Since MicroStrategy bought its first BTC in August 2020, it has been joined by Latin America's e-commerce giant MercadoLibre, South Korean video game publisher Nexon, Metaplanet, Semler Scientific, and the mega-cap stock Tesla. On balance, the predictions were on the mark. Keep an eye out for our 2025 predictions.

Chair Jerome Powell Shanks Santa And The S&P 500 Since the Fed cut interest rates in September, bond yields have been on an upward trajectory, a trend that Jerome Powell has yet to explain satisfactorily. At the FOMC meeting last week, Jerome Powell made a very good case for raising interest rates, but the Fed cut rates instead.   Markets are concerned about inflation, and Fed cuts to interest rates are being met by increasing bond yields at the long end of the curve and a strengthening dollar. The markets believe the Fed's approach to interest rates is a policy error. As noted in the previous post, increasing bond yields and a strong dollar are not good for stocks in the S&P 500. The economy is relatively strong, and there's stimulus on the horizon from the Trump administration. The proposed Trump tariffs will have an inflationary effect. Monetary easing is unnecessary. All it will do is increase inflation expectations. The FED's lack of direction at the FOMC meeting and apparent lack of model driving their decisions are concerns for markets. There is no consensus within the FED on policy. Some will point to stock valuations as the reason for the S&P 500 crash on Wednesday. However, that is not the whole picture. While a correction is healthy from a valuation perspective and will have removed leveraged positions, it wasn't the primary driver of the crash. Debts and deficits matter. There is a global sovereign bond push back to rising debts and deficits. While inflation has moderated, central bank interest rate cuts are not helpful in a bond bear market. Today, the S&P 500 opens in negative gamma. The key levels remain unchanged from the start of last week. The gamma flip zone is 5955, the call resistance is 6132, and the put support is 5860. While the S&P 500 did drop below the put support level before rallying on Friday, the put support level didn't move down, which is a positive sign. That is likely a reflection of the positive PCE report on Friday. After rallying on Friday, the S&P 500 did push through the gamma flip zone. However, that push was met with significant bear resistance, which pushed the price back below the gamma flip zone.      There will be light trade this week. However, if bulls can push price through the gamma flip zone and close above it, then the prospect of a Santa rally is not completely dead. If the S&P 500 continues to trade this week in negative gamma, then that is not a good sign of potential gains and volatility in January.

S&P 500 Consolidates Around Mega Cap Stocks Mega cap and growth stocks, particularly Tesla and Google, rallied in the S&P 500 last week. The percentage of stocks on Friday above their 20-day moving average decreased to 37% from 55% the previous week. Overall, the underlying breadth in the S&P 500 deteriorated last week. One hundred seventeen stocks made new monthly lows. As a result, market sentiment is currently neutral.   At first sight, it looks like there was an unwind of high-beta momentum stocks last week as hedge funds de-levered their books and switched to large-cap tech stocks to lower their volatility into year-end. This is a typical safety trade, strong dollar trade, and strong U.S. bond yield trade and linked to seasonality. However, that can't go on forever. Either liquidity tightens, and the dollar and bond yields keep going up, which would be a problem for all assets, or something reverses it. A dovish Fed this week could be the reversal catalyst. The Fed has signalled to the market that it will cut interest rates this week despite a hotter-than-expected PPI print last week.     The key levels in the S&P 500 remained unchanged last week. The S&P 500 call resistance is 6132, the gamma flip zone is 5955, and the put support level is 5860. Overall, the S&P 500 was down last week, which was no surprise. From a seasonal perspective, the second week of December is always weak. In contrast, the last two weeks of December are seasonally one of the best times of the year to hold stocks. All the signs are that the market is willing to take risks. The U.S. consumer is feeling more confident and willing to spend. As noted in our post on 1 December, the U.S. household allocation to stocks is at an all-time high. Mega caps are leading the market, along with consumer discretionary and financial stocks, which are still performing well. On that basis, last week's close in the S&P 500 could be the bottom for the next couple of weeks.  

MicroStrategy Added To The Nasdaq 100 Index The Nasdaq 100 will add MicroStrategy to the index on 20 December. By market opening on 23 December, all ETFs that track the NASDAQ will own MicroStrategy. It's unclear precisely what that means regarding initial flows; however, Bloomberg has predicted that MicroStrategy will rank 48 with initial flows of $2.1 billion. The inclusion of MicroStrategy in the NASDAQ is a massive milestone for the company. The company's value will benefit from the initial flows, ongoing passive flows, and rebalancing within the index. The ETFs that track the NASDAQ make the initial flows into MicroStrategy. They need to hold enough stock to reflect MicroStrategy's market cap and weighting within the index. That is a one-time flow into the stock. However, MicroStrategy stands to gain significantly from ongoing passive flows ($550 billion), primarily from institutional investment in the ETFs that track the index. This could create a substantial buy-side pressure for the stock. In addition, MicroStrategy could benefit from quarterly rebalancing flows within the NASDAQ index. Rebalancing flows reflect a company's relative weighting within the index. More successful companies increase in market cap and their weighting increases. Less successful companies decrease in value, and their weighting decreases. In effect, the index is "self-organising". With few exceptions there is no buying or selling required by the ETFs as the gain or loss in a stock's market cap is tracked by the weighting. Currently, Apple has the highest weighting of 8.9%. If MicroStrategy were to enter at rank 48, that would be a weighting of 0.5%. The top 10 companies in the index account for 52% of the index's weighting. So what does that all mean for the MicroStrategy share price? The initial flows in the 3 days to 23 December could potentially result in a 10% to 15% uplift in the MicroStrategy share price. This projection is based purely on the current price and inflows of $2.1 billion, assuming all other factors remain constant. It does not take into account any movement in bitcoin's price or other market activity. Price predictions beyond that point can be found in the crystal ball.

Expect A Correction In The S&P 500 in Early 2025 The S&P 500's recent trend of closing the week at new all-time highs is a significant indicator of the market's current momentum. The non-farm payroll print, which exceeded analyst expectations, further bolstered the Fed's probability of cutting interest rates in its December 18th meeting. The S&P 500 call resistance increased to 6132 from 6055 at the start of the week. The gamma flip zone is 5955, and the put support level is 5860. Expect further gains into the early part of this week with a pullback at the call resistance level. Investors should be constructively bullish at this point. The seasonal trend for the month of December clearly favours the bulls, and a Fed rate cut, if it happens, will significantly boost stock valuations. This combination will keep lifting stocks and support the overall valuations in the S&P 500. Valuations in the S&P 500 are high, and single-stock leverage exposure has increased significantly. The Forward P/E ratio for the S&P 500 now sits at 22x. That is just short of the 2021 levels and getting closer to the 2000 bubble level. The 30-year average is 16.8x; one standard deviation from the average would be 20x. Note that the mega-cap stocks are trading at around 28x, and the rest of the market is trading at around 19 to 20x. Increased leverage at current levels is often a sign of peak euphoria. Historically, when the S&P 500 is at peak euphoria, it puts in the top six to eight weeks later.   That said, the current valuation levels are not a reason to sell. Valuations have never derailed a bull market. It's usually an external factor—a Fed policy error (most likely), something geopolitical, or something the administration brings in. Valuation is not going to be the reason that this bull market derails. Now is a good time to prepare for the potential impact of an external factor, which may become more evident at the start of 2025 with any material downside between mid-January and April 2025.

Will the S&P 500 Weaken This Week? The S&P 500 closed last week at an all-time high and up 26% for the year. As predicted in our last post, the U.S. Dollar has weakened, and bond yields have followed a similar trajectory. The S&P 500 gamma flip zone is at 5930. The call resistance is 6055, and the put support is 5930. Buying pressure will likely meet any pullback in the S&P 500 this week as the overall call flow is strong into the end of the year. Household allocation to stocks is at an all-time high. Stocks now account for 41.8% of financial assets held by U.S. households. Historically, when allocation to stocks has reached this level (tech boom, financial crisis and 2021), it has been followed by a significant correction in the S&P 500. ETF assets are being leveraged at a ratio of $12 long to $1 dollar short, the highest ratio since 2021. Investors are bullish and are buying into the market with leverage. Can the S&P 500 go higher before correcting? Will there be a correction in 2025? From a sentiment perspective, the institutions remain bullish for the S&P 500 over the next six months. Retail traders, however, are beginning to signal a bearish perspective. If it’s in the press, then it’s in the price. On that basis, there is nothing to be overly concerned about in the near term. The probability that the S&P 500 continues to make all-time highs into year-end is high, and the ‘Santa Rally’ at this point seems probable. ‘Follow the price action and not necessarily your opinions’ is a sound principle. While stock allocations at all-time highs and evidence of FOMO in the market may be shaping sentiment, they should not be the only drivers of investment decisions. Analysts are optimistic about the S&P 500's potential, with some predicting it could rise as high as 7,000 by the end of 2025, marking a 17% gain from current levels. That will likely be realised by relative outperformance in mid and small-caps.   Since the election, certain sectors have shown remarkable resilience, particularly financials, regional banks, energy, utilities, and materials. Their performance is a strong indicator that we are not in a bear market.    It's important to note that not all sectors are performing as strongly. Technology and semiconductors, in particular, are showing signs of weakness.

Will The S&P 500 Crash This Week? The S&P 500 sank on Friday, tracking steep weekly losses, as investors absorbed Federal Reserve Chair Jerome Powell's signal that the Fed isn't in a hurry to make interest rate cuts. The market is now pricing in a 62% probability that the Fed will cut interest rates in December. At the beginning of the week, the likelihood of a rate cut in December was 81%. At the start of last week, 66% of stocks in the S&P 500 traded above their 20-day Moving Average. That has now fallen to 50% and will likely fall further this week. On balance, if the Fed reduces the trajectory of interest rate cuts and the economy remains strong, that should be good for equities in the longer term. Bond yields advanced last week, and the U.S. dollar remains strong. The dollar broke through our predicted level of 106 before rejecting 107. If yields continue to move higher due to economic expansion or inflation, that could signal concern about the economy and caution about equities. Pay attention to USD/JPY. The 10-year yield and USD/JPY chart are correlated. The USD/JPY has topped, and it won't see 162 again soon. When the USD/JPY starts pulling back, the yields will start pulling back. If the USD/JPY breaks down under 151, then that would signal that the U.S. dollar is ready to pull back hard. If you get the U.S. dollar right, then you get the market right. If the U.S. dollar pulls back to 102, all assets will have a chance to rally. As predicted last week, the S&P 500 call resistance failed to move upward, and the S&P 500 made an asymmetrical move down to the gamma flip zone. However, the S&P 500 remains in positive gamma. The call resistance level remains at 6000, and the gamma flip zone and put support levels did not change. If the S&P 500 moves lower today and into negative gamma, then the put support level at 5785 comes into play as the next support level. Note: Stocks tend to rally after the election, although it's not linear. There is normally a period of sideways movement in the first 15 to 20 days post-election week and then a rally into the end of the year. The rally can be linked, in part, to the central bank debt re-financing cycle and the liquidity injection they facilitate. The rally fades after the inauguration, with downward price momentum in the following 90 days of the new presidency before upward momentum resumes at year's end. The downward price momentum is a seasonal event linked to the March to April tax season. If global liquidity remains strong at that point, then the S&P 500 should rally strongly into the end of 2025.

Bitcoin Blasts Through $80k   The outcome of the Presidential Election was the catalyst that Bitcoin has been waiting for. Bitcoin has performed like a beach ball underwater in the last 3 months. However, early signs are that the shackles are off. Bitcoin has blasted through the previous all-time high and is pushing through $80k. Trumps recent u-turn on the future of bitcoin is a factor. However, it’s not just the benefit that a pro crypto Trump will bring; it’s also the number of pro crypto candidates (around 250) that were elected to the senate.   In the next 12 to 18 months the crypto space could see a Bitcoin Act, a bi-partisan policy on crypto, progress with tokenisation and a policy on Defi. The bitcoin policies outlined in the Trump campaign will form the biggest fundamental upside narrative for bitcoin this cycle. Adding bitcoin to the U.S. National Reserve and buying bitcoin to add to the Reserve would be bullish for the price of bitcoin. If that were to happen then every sovereign state would be at a strategic disadvantage and would have to follow the lead set by the U.S. That would add a whole new level of demand and could drive the bitcoin price to $250k. That said, there are reasons to remain cautious on the bitcoin price.   The crypto policies that Trump outlined in his campaign may have been proposed as a means to secure votes. He may not progress those same policies. In addition, banks and institutions will wait to see the actual crypto policy adopted by the Trump administration. The policies will likely become clearer and be enacted in 2025. Seasonally bitcoin does exhibit upward momentum in price in the 4th quarter of the year of the halving event, irrespective of who wins the election. That upward momentum can be linked, in part, to the central bank debt re-financing cycle and the liquidity injection they facilitate. Traditional markets tend to forward price the impact of increased liquidity once it’s clear that the liquidity spigot has been opened. That is often followed by a correction because the flows don’t arrive until the new year. That is likely to apply to the bitcoin price performance. If you look at bitcoin price in previous election periods the trajectory is up until the presidential inauguration. There then follows a period of chop into March. March to April is tax season and bitcoin does experience selling pressure and a pullback in that period. That pullback is also observed in traditional equity markets. If global liquidity at that point remains strong then there should be a strong rally in the price of bitcoin into the end of the year. While it’s difficult to be too predictive, the probability of a continued rally in bitcoin price into the end of this year remains strong.   Risk on sentiment is definitely back in play. That said the FED trumps all. If they remove liquidity it’s game over.