Predicting the future is difficult, but as traders and investors we should have a plan. Like all plans, this one will change as the underlying scenario changes - markets are constantly evolving. This plan is based solely on my predictions of how the market will develop over the next year. It provides insight into my thinking for 2025, but should not be construed as financial advice.
→On January 10, Bitcoin ETF was launched;
→BTC hit a new high, briefly triggering altcoin season;
→ Then it entered the volatile period of Q2 and Q3, with BTC hovering between $50,000 and $60,000;
→After the election day, BTC hit a new high, rising all the way to $100,000;
→It has not been able to effectively break through the 100,000 mark for the time being and is currently hovering above 90,000 US dollars.
It is important to note that the alt season often begins at the high point of Bitcoin. The first time was when BTC was hitting $69,000 but failed to break through effectively; the second time was when BTC was hitting $100,000.
The next altcoin cycle will most likely begin after BTC stabilizes above $100,000. I can’t predict the future, and while I hope this will happen in Q1 2025, it’s also possible that we’ll see a repeat of the Q2/Q3 2024 volatility in the coming months — I have to be prepared for that. So here are all the scenarios I drew up.
Scenario 1: Bitcoin and altcoins rise together
In that case, the rise will be the only theme in 2025, and we will enter another round of alt season. As Bitcoin continues to rise, all currencies will perform well, and we will repeat the last two months of 2024, with the entire market going "up, up, up".
Likelihood: 30% - 40%
Corresponding strategy: Take advantage of the current "panic" to buy and get on board strong altcoins.
Hypothesis 2: Bitcoin rises, while other currencies rise slightly
This will be a repeat of 2024, where we will see altcoins oscillating over the next few months, but Bitcoin is more bullish (because only Bitcoin is going up). Some altcoin sectors will also perform well.
Likelihood: 50% - 60%
Corresponding strategy: Still buy during the current “panic”, but you need to invest in altcoins in specific sectors. The key is to avoid areas with high attention and look for the next narrative that may rise.
Hypothetical Scenario 3: Bitcoin rises, altcoins fall
This means that the top is now in for altcoins, although Bitcoin will continue to perform well.
Likelihood: 20% - 30%
Corresponding strategy: Sell all altcoins. Although we have to bear some retracements, if the altcoins do not rise, we may have to sell them all.
Scenario 4: Bitcoin falls, altcoins fall
Likelihood: 10% - 20%.
I believe several things will happen. I believe BTC’s next new high will not take as long as 2024 because the backdrop of macro tailwinds is real. ETFs have been launched during a cycle of regulatory hell, but TradFi still needs to work hard to sell the story of BTC to customers because the world does not believe in the importance of Bitcoin.
Now that Trump is about to take office, there is a lot of talk about a Strategic Bitcoin Reserve (SBR). Market sentiment has changed, and I will not speculate on the possibility of establishing a Strategic Bitcoin Reserve system - I have no experience with the intersection of politics and finance.
What I care about is the narrative — the fact that this new regime coming in has brought a lot of new attention to digital assets, and it’s easier to convince people to buy Bitcoin now that even the president of the world’s largest country is discussing it so frequently.
This change in the macro backdrop is significant. As a result, I believe Bitcoin will continue to have tailwinds in 2025, while altcoins are a similar but different story.
It’s all about positioning and timing. I’m bullish on 2025, but I don’t know how long it will take — while I do think the upside will come sooner than 2024, altcoins will still bleed in the absence of a catalyst.
My plan is to stay net long on Bitcoin or any other coin as long as the cycle hasn't peaked. I don't think 2025 will be a repeat of the summer of 2024, but I think we'll have a period similar to now - the market is just relatively quiet, but prices are still well maintained.
The on-chain world is completely different, and on-chain markets can easily see -70% swings when the tide recedes. So for on-chain markets, my goal is always to sell at the peak of attention and reinvest funds into the top altcoins (top 20) and then slowly start deploying further.
I don’t think altcoins will top here, just as I don’t think Bitcoin will continue to rise while altcoins die, and I don’t think Bitcoin will reach a cyclical top at this location.
So my conclusion is: BTC will continue to rise, and the increase will exceed 2024; for altcoins, my theme is still offense, but you need to know when to switch to defense, but the defensive tendency will be lower than in 2024.