Bitcoin's Potential January Correction (20-30%) in the 2025 Crypto Bull Run

What are the odds we get a historically-consistent "January correction" for the 2025 Bitcoin/crypto bull run?

Historical data on bitcoin and broader crypto bull cycles has consistently pointed to January as a month prone to notable, albeit short-lived, market corrections.

Even in strong uptrends, the combination of seasonal patterns, macro events (including the latest Federal Reserve announcements), and cyclical investor behavior often coincide with selloffs or profit-taking in the first month of the year.

Odds are good that we’ll get another reasonable correction for the crypto market in January 2025 that may shake some people out… but this should be expected.

---

History of January Corrections in Bitcoin & Crypto Bull Runs

1. January 2017

   • Context: Bitcoin was in a clear bull phase following the 2016 halving. The market had rallied strongly in Q4 2016.

   • Correction: A sudden 30% drop in early January 2017, largely attributed to Chinese exchange policy changes and profit-taking after a run-up.

   • Rebound: Within 2–3 weeks, prices recovered and resumed the bull trend through all of 2017.

2. January 2021

   • Context: Post-2020 halving, Bitcoin soared from sub-$10k to over $40k by early January.

   • Correction: A ~27–31% pullback in mid-January, often linked to extreme leverage, funding rates, and traders locking in huge year-end gains.

   • Rebound: The correction lasted about 2 weeks before continuing the uptrend toward $60k+ by Q2.

3. January 2015

   • Context: Although 2015 was the tail-end of a bear market, the first few weeks of January still saw additional capitulation. A slightly different scenario but underscores that volatility in January can appear at cyclical pivots.

   • Rebound: The market eventually bottomed in January 2015, forming the basis for the next major bull cycle.

Key takeaway: During strong bull runs (2017, 2021), January has been prone to a 20–30% correction. It tends to happen after a notable Q4 rally, combining year-end euphoria with new-year risk aversion.

(Related: Triple Lens Strategy for Bitcoin/Crypto Cycles)

---

Current Macro & Market Backdrop

1. Post-FED Rate Cuts & Uncertainty

   • The Fed’s December 2024 decision indicates only 2 rate cuts in 2025 vs. four previously, fueling mild risk-off sentiment.

   • Market participants may wait to see if inflation continues to moderate or if any January macro data (jobs, CPI) surprise leads to re-pricing of the Fed path.

2. Trump Administration Inauguration (Jan 20, 2025)

   • Historically, administration changes can heighten uncertainty, especially if new tariffs or fiscal measures are announced.

   • The market may overreact or see a “sell-the-news” effect in mid/late January upon actual policy signals.

3. Extended Rally from August–December 2024

   • Bitcoin and Ethereum in particular have rallied substantially, setting higher highs above $100k for BTC and $4k for ETH.

   • Some on-chain indicators (Puell Multiple, MVRV-Z Score, stablecoin ratio oscillator) show moderately overheated short-term signals, which historically precede a local top or correction.

(Related: Bitcoin Peak Bull Cycle Zone Checklist)

---

Odds of a Significant Crypto Correction (January 2025)

Combining:

• Historical bull cycle tendencies (January dips in 2017 and 2021).

• Recent Fed caution and hawkish lean (fewer cuts next year).

• Potential policy or tariff news around inauguration.

• On-chain data that suggests pockets of short-term euphoria.

Below is a breakdown of probability assessments for a noticeable correction: