Author: Bitcoin Magazine Pro
Compiled by: Blockchain in Plain Language
As we move into 2025, it's time to examine the potential scenarios Bitcoin may face this year in a rational and analytical manner. By combining on-chain data, market cycles, macroeconomic data, and other factors, we can move beyond mere speculation to paint a data-driven picture for the upcoming months.
1. MVRV Z-Score: Huge Upside Potential
MVRV Z-Score measures the ratio between Bitcoin's realized price (the average purchase price of all Bitcoins in the network) and its market capitalization. By normalizing the volatility of this ratio, we obtain the Z-Score, which has historically been able to clearly present the trends of market cycles.
Figure 1: MVRV Z-Score shows we have a long way to go before reaching market cycle peaks.
Currently, the MVRV Z-Score indicates that we still have significant upside potential. While the Z-Score has previously exceeded 7 in past cycles, I believe any value above 6 indicates market overextension and requires closer observation of market peaks in conjunction with other indicators. Currently, our level is comparable to May 2017, when Bitcoin's price was only a few thousand dollars. Considering historical context, there is still potential for several hundred percentage points of increase from the current level.
2. PiCycle Oscillator: Bullish Momentum Recovers
Another key indicator is the PiCycle top and bottom indicator, which tracks the 111-day and 350-day moving averages (the latter multiplied by 2). Historical data shows that when these two moving averages cross, it often signals that Bitcoin's price will peak within a few days.
Figure 2: Macroeconomic trends remain bullish.
The distance between these two moving averages has started to rise again, indicating that bullish momentum is recovering. Despite experiencing several periods of range consolidation in 2024, the current breakout suggests that Bitcoin is entering a stronger growth phase that may last for several months.
3. The Exponential Growth Phase of the Cycle
Historically, Bitcoin's price cycles typically last 6 to 12 months in the 'post-halving cool down' phase before entering an exponential growth phase. Based on past cycle data, we are nearing this breakout point. Although returns may decline compared to earlier cycles, we may still see significant increases.
Figure 3: Compared to past bull market cycles, we are nearing the most bullish phase of the cycle.
For context, in the 2020 cycle, after breaking the previous all-time high of $20,000, Bitcoin's price peaked at nearly $70,000, representing a 3.5 times increase. If we see a conservative estimate of a 2 to 3 times increase over the previous peak of $70,000, Bitcoin could realistically reach between $140,000 and $210,000 in this cycle.
4. Macroeconomic Factors Supporting Bitcoin's Performance in 2025
Despite facing some resistance in 2024, Bitcoin continues to perform strongly, even in the context of a strengthening US Dollar Index (DXY). Historically, Bitcoin's movements have typically been inversely correlated with DXY, so if DXY shows a strong reversal, it could further drive Bitcoin's upward potential.
Figure 4: Bitcoin continues to rise even with a significant increase in the US Dollar Index.
Other macroeconomic indicators, such as the high-yield credit cycle and global M2 money supply, indicate that the market environment for Bitcoin is improving. The monetary supply contraction observed in 2024 is expected to reverse in 2025, laying the groundwork for a more favorable market environment.
5. Main Cycle Chart: We have a long way to go.
The main Bitcoin cycle chart aggregates multiple on-chain valuation indicators, showing that Bitcoin still has considerable growth potential before reaching overvaluation. The upper limit is currently around $190,000, and this upper limit continues to rise, further reinforcing the outlook for sustained upward momentum.
Figure 5: The 'overvaluation' level in the main cycle chart has exceeded $190,000.
6. Conclusion
Currently, almost all data indicators point to a bullish 2025. As always, past performance does not guarantee future results, but the data strongly suggests that Bitcoin's best times may still lie ahead, even in light of an exceptionally positive performance in 2024.
