Article Source: Felix
Author: Kyle, Crypto Researcher
Compiled by: Felix, PANews
Since this bull market cycle began in 2024, the current cycle has been: January 10, BTC ETF launched → until Bitcoin reached a historical high, boosting the altcoin season, entering the volatile Q2/Q3 2024, with Bitcoin continuing to break through at $50,000 and $60,000, currently hovering around $90,000.
It is worth noting that the altcoin season begins when BTC peaks; the first round was BTC advancing to $69,000 but failing to break through properly, the next round is advancing to $100,000.
The next round of altcoin season is likely to see Bitcoin stabilize at $100,000, which is hoped to occur in Q1 2025. However, it may replay the story of Q2/Q3 2024 in the coming months. Here are all the possible scenarios:
Scenario 1: BTC + altcoins generally rise. Rising all the way in 2025, followed by another altcoin season, as BTC continues to rise, all tokens perform well, repeating the situation of the past 2 months (30-40% probability).
Strategy: Buy high-performing altcoins on dips.
Scenario 2: BTC rises, altcoins rise less; the story of 2024 repeats, fluctuating up and down in the coming months but more bullish than in 2024 (because BTC rises); thus choose well-performing tokens (50-60% probability).
Strategy: Buy selected altcoins on dips. Avoid highly publicized tracks, find the next 'get-rich-quick coin'.
Scenario 3: BTC rises, altcoins generally decline (20-30% probability).
Strategy: Sell all altcoins. Reduce altcoin investments; if the altcoins held have not risen for a long time, all may have to be sold.
Scenario 4: BTC drops, altcoins generally drop. Everything has peaked (10-20% probability).
Due to macro positives, a new BTC ATH breakthrough may not take as long as in 2024. During the hellish summer of this year, the ETF was just launched, and TradFi was still struggling to pitch the BTC story to clients. Most importantly, the outside world generally does not believe in the significance of Bitcoin.
Now that Trump has won, discussions about strategic Bitcoin reserves are underway. Although the likelihood of establishing a strategic Bitcoin reserve is low, Bitcoin's reputation has changed.
The narrative is important — in fact, the new regime we are currently in brings renewed attention to the digital asset space, and the next U.S. president's frequent discussions about Bitcoin make it much easier to persuade people to buy Bitcoin.
This regime change is extremely important. Therefore, BTC will continue to maintain a tailwind in 2025. The situation is similar for altcoins but with some differences.
Total3 (the total market capitalization trend of all altcoins) reached a historical high in Q1 2024, then peaked in Q4 2024. It more or less follows the same pattern (there isn't much difference between scenario 1 and scenario 2 above).
The key is positioning and timing. While optimistic about 2025, it is uncertain how long it will take. Although the rise in 2025 may come earlier than in 2024, altcoins will still see significant declines during periods without catalysts.
As long as the cycle does not end, whether Bitcoin or altcoins, remain bullish. 2025 will not see a repeat of the summer of 2024, although it may encounter periods like now (just a smooth period), but prices will still remain at a relatively good level.
The on-chain situation is different; when the tide goes out, it is easy for on-chain to see a 70% drop. Altcoins are not expected to peak at this time, as it is unclear how BTC can continue to rise while altcoins 'die,' nor do we see BTC peaking here.
Conclusion:
BTC rises, with an increase exceeding that of 2024
Altcoins are in an upward trend, although there may be declines, they will not be as severe as in 2024
Risk
Cycle top
We are far from the cycle top but must continuously reassess weekly. The cycle top is not necessarily an 'event,' but rather a range that gradually approaches over time.
Bitcoin reserve plan risk
With the start of the new presidential term, everyone will be watching Trump's words and actions. While there are positives for Bitcoin, it would be quite pessimistic if Trump completely ignores the reserve plan. The more likely scenario is that the reserve plan does not happen or is delayed by something.
In the latter case: as long as it benefits Bitcoin, it was initially bearish but ultimately a bullish event.
TLDR: Bullish signal = cycle continues. Bearish signal = plan must be revised. The cycle may continue, but the chance is lower.
Supply risk
The summer of 2024 experienced a crazy macro environment, with the stock market hitting new highs repeatedly. However, due to major suppliers like Gox and Grayscale GBTC repeatedly striking hard, there were no benefits, only drawbacks.
Supply risk can never be alleviated. There will always be entities holding large amounts of Bitcoin — the UK government, Silk Road, FTX distributions, etc. This is something you must keep a close eye on, but if all goes well, these events are good opportunities to buy on dips.
Macro risk
A small rate cut is expected; while not overly optimistic, the fact is that as long as interest rates continue to decline, liquidity will improve. Likewise, bullish signal = cycle continues. Unless there is a rate hike/no rate cut, the macro environment should be favorable for digital assets.
Bearish signal is inflation rising again, and the Federal Reserve may have to raise interest rates to bring down inflation.
Token recommendations
1. AI
We have already experienced several waves. The next wave is expected to arrive soon. Buying and holding will not yield good results. Goat, the token that spawned all of this, has dropped 60% from its peak and may continue to perform poorly.
Preferred: Application technology / Swarms / Gaming / Consumer-focused AI
ALCH (game development), Griffain (agent for wallet control), Digimon, Ai16z, etc., are all preferred.
2. DeFi
DeFi will continue to be a great narrative, however, it is very difficult to invest in, as few tokens can benefit from it, and even if they do, the gains may not be significant.
Frankly, in terms of risk-reward, DeFi is not a first choice.
Preferred: AAVE / ENA / Morpho / Euler / USUAL
Alternative: Stablecoins / Payment-related tokens
3. L1
L1 will make a comeback. It is evident that Hype is substantial. L1 itself is something the market has been ignoring — it is one of the overlooked areas but holds great opportunity (as Hype grows 10 times).
Preferred: SUI / Hype
Alternative: Abstract
4. NFT tokens and gaming tokens
The NFT token sector is worth watching. PENGU is slowly recovering, Azuki has ANIME tokens, Doodles has... whatever it is. NFT revival is not expected, but its tokens will return. Additionally, it is interesting to dig deep to find intriguing games with upcoming tokens.
Preferred: Pengu / Anime (Azuki) / Spellborne / Treeverse
Alternative: Prime / Off the grid (if the token launches) / Overworld
5. Other narratives
Data tokens: Kaito / Arkm
Meme: PEPE
DePIN: PEAQ / HNT
Ordinals
Old DeFi: CRV / CVX
2025 Predictions
DePIN will be implemented in some way by a company, possibly through acquisition.
Binance will lose market share as the largest exchange. Not from Hyperliquid, but from Bybit / OKX
With new advancements in VR, metaverse tokens are revitalized.
ICOs are great again.
The ETH chain altcoin season will not happen.
Sui reaches double digits (at least $10).
Ethereum ETF staking is approved, leading to more yield products for staking other tokens, as well as yield aggregators.
A major artist uses NFTs and tokens to engage fans and provide rewards.
Bitcoin reaches $200,000.
More CEOs/founders of L1 institutions leave their original companies after seeing the Aptos Labs CEO depart (PANews note: On December 20, Aptos Labs co-founder Mo Shaikh stepped down as CEO, co-founder Avery Ching will take over).
Base fails in competition with L1s, another L1 takes over. Solana continues to hold.
Related reading: 2024 Bitcoin Year-End Review: Price increases of 131% are less than last year, TVL surges 21 times to over $6.7 billion.
