Author: Bitcoin Magazine Pro
Translation: Blockchain in Plain Language
As we move into 2025, it's time to examine the possible scenarios Bitcoin may face this year in a rational and analytical way. By combining on-chain data, market cycles, macroeconomic data, and other factors, we can go beyond mere speculation to paint a data-driven picture for the coming months.
1. MVRV Z-Score: Huge Upside Potential
The 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, an indicator that has historically shown the trends of market cycles clearly.
Figure 1: MVRV Z-Score Shows We Are Still Far From Market Cycle Peak
Currently, the MVRV Z-Score indicates that we still have significant upside potential. Although the Z-Score has exceeded 7 in past cycles, I believe that any value above 6 indicates market overextension, requiring closer observation of market peaks in conjunction with other indicators. Our current level is comparable to May 2017—when Bitcoin's price was only a few thousand dollars. Considering the historical context, there is still potential for several hundred percentage points of upside from the current level.
2. PiCycle Oscillator: Bullish Momentum Resumes
Another key indicator is the PiCycle Top and Bottom indicators, which track the 111-day and 350-day moving averages (the latter multiplied by 2). Historical data shows that when these two moving averages cross, it typically indicates that Bitcoin's price will peak within a few days.
Figure 2: Macro Trends Remain Bullish
The distance between these two moving averages is beginning to rise again, indicating that bullish momentum is resuming. Although 2024 has seen several periods of range consolidation, the current breakout suggests that Bitcoin is entering a stronger growth phase that could last for months.
3. Exponential Growth Phase of the Cycle
Historically, Bitcoin's price cycles typically last 6 to 12 months in the 'post-halving cooling' phase before entering the exponential growth phase. Based on past cycle data, we are approaching this breakthrough point. Although the rate of return may be lower than in earlier cycles, we could still see significant gains.
Figure 3: Compared to previous bull market cycles, we are approaching the most bullish phase of the cycle
As background information, after breaking the previous all-time high of $20,000 during the 2020 cycle, Bitcoin's price peaked at nearly $70,000, increasing by 3.5 times. If we see a conservative estimate of a 2x or 3x growth from the last peak of $70,000, Bitcoin could realistically reach $140,000 to $210,000 in this cycle.
4. Factors Supporting Bitcoin's Performance in 2025
Despite facing some headwinds in 2024, Bitcoin continues to perform strongly, even in the context of a strengthening Dollar Index (DXY). Historically, Bitcoin's movement has typically been inversely correlated with the DXY, so if the DXY experiences a strong reversal, it could further boost Bitcoin's upside potential.
Figure 4: Even with a Significant Rise in the Dollar Index, Bitcoin Still Rises
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 seen in 2024 is expected to reverse in 2025, laying the foundation for a more favorable market environment.
5. Main Cycle Chart: A Long Way to Go
The main Bitcoin cycle chart aggregates multiple on-chain valuation metrics, showing that Bitcoin still has considerable room for growth before reaching overvaluation. The current upper limit is around $190,000, and this upper limit continues to rise, further strengthening the prospect of sustained upward momentum.
Figure 5: The 'Overvaluation' Level of 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 the context of an exceptionally positive performance in 2024.
