Bitcoin price prediction 2025: Will the Fed fuel the next crypto big rally?

The crypto market is in full-on “hurry up and wait” mode. Bitcoin is lingering just under $83,000, and investors are holding their breath ahead of the Federal Reserve’s latest move. The sentiment? Cautious, with a side of “let’s see what Powell says.” 

While no one expects an actual rate cut in the immediate, the market is bracing for clues about what’s coming next-and whether the much-hoped-for dovish pivot is in the cards.

The slowdown in Bitcoin’s trading volume speaks volumes (pun intended). In the last 24 hours, only $22 billion worth of BTC has changed hands-a sharp drop from last week’s $49 billion. Clearly, traders are sitting on the sidelines, waiting for the Fed’s next move before making their own.

Bitcoin’s 2025 playbook: All about the Fed’s tone

For Bitcoin, the next few months may be less about actual policy changes and more about Powell’s choice of words. Ryan Lee from Bitget Research predicts BTC will trade between $80,000 and $86,000 post-Fed announcement with "80% confidence." Not the most thrilling range, but it underscores that we’re in a consolidation phase rather than a chaotic bull run (yet).

Futures markets are also flashing caution signs. Bitcoin futures open interest has dropped 30% from its January peak of $69 billion to $48 billion today. For traders, this means a less speculative froth - a good thing if you’re hoping for a more sustainable rally later in the year.

Ethereum’s identity crisis: Can it still compete?

While Bitcoin is in a holding pattern, Ethereum is dealing with an existential dilemma. Standard Chartered recently slashed its 2025 ETH price target from a sky-high $10,000 to a much humbler $4,000. Why? A wave of competition from Layer 2 networks like Base (which has apparently siphoned off $50 billion in value from Ethereum) and the upcoming Converge blockchain.

There’s even talk of the Ethereum Foundation considering a “tax” on Layer 2 solutions to protect ETH’s dominance-an idea that would undoubtedly stir controversy. Meanwhile, big investors are taking notice. Whale wallets holding between 10,000 and 100,000 ETH dumped a massive 630,000 ETH last week alone. When the big players start reducing their exposure, smaller investors tend to follow.

The fed’s impossible balancing act

So what’s the wildcard in all of this? The Federal Reserve. Inflation is cooling, but it’s still above target, leaving Powell in a tricky spot. He needs to acknowledge economic progress without accidentally sparking expectations for aggressive rate cuts.

According to CME FedWatch, traders see zero chance of a rate cut tomorrow, a 20% chance in May, and a much more promising 66% chance by June. Translation? 

Markets think the Fed will have enough justification by mid-year to finally start easing. Even Donald Trump is pushing for cuts, citing recent moves by the Bank of England and European Central Bank. But the Fed remains locked into its “data-dependent” strategy.

What’s next for Bitcoin and Ethereum in 2025?

For Bitcoin, the path ahead looks relatively steady compared to altcoins. If Powell even hints at a dovish stance, BTC could find renewed momentum toward fresh highs. Analysts at QCP Capital put it best: "Any dovish signal from Powell could be the catalyst that sparks upside momentum."

Ethereum’s situation is a bit more complicated. Other analysts see a  17% chance of ETH reaching $3,000 by September-and a 31% chance it could drop below $1,500. Ouch. But there’s a silver lining: staking continues to grow, with 180,000 ETH added to staking contracts last week. That suggests a core group of believers is playing the long game.

Technical insight: The longer term game

Bearish signs are evident on BTC’s weekly chart, however prices remaining above the 100-day moving average-suggests that the longer-term bullish trend is still alive. RSI rising up steadily is also a sign of upward pressure slowly building up. Key levels to watch out for on the upside are $92,965 and $100,000. While on the downside, the key level to watch is $76,937.

As for ETH, bearish signals are dominant as prices inch lower with RSI flat around the midline. However, prices touching the lower bollinger band hints at oversold conditions. Key levels to watch out for on the upside are $2,215 and $2,800. While on the downside, the key level to watch would be around $1,775.

You can get involved and speculate on the price of these two incredible assets with a Deriv MT5 account or a Deriv X account.