Article source: Felix
Author: Kyle, Crypto Researcher
Compiled by: Felix, PANews
Since the start of the current bull market cycle from 2024, the cycle so far has been: January 10 BTC ETF launch → until Bitcoin's historical new high, propelling the altcoin season into a volatile Q2/Q3 2024, with Bitcoin continuing to break through at $50,000 and $60,000, currently hovering around $90,000.
Notably, altcoin seasons start when BTC peaks; the first round was BTC moving towards $69,000 but failed to break through properly, the next round is moving towards $100,000.
The next round of altcoin season is likely to see Bitcoin stabilize at $100,000, hoping to occur in Q1 2025. However, it may replay the story of Q2/Q3 2024 in the coming months. Here are all possible scenarios:
Scenario 1: BTC + altcoins generally rise. A steady increase in 2025, followed by another altcoin season as BTC continues to rise, and all tokens perform well, repeating the last 2 months' scenario where everything is rising (30-40% chance).
Strategy: Buy the dips in well-performing altcoins.
Scenario 2: BTC rises, altcoins rise but fewer; the 2024 story repeats, fluctuating up and down in the coming months, but more bullish than 2024 (since BTC rises); therefore, choose well-performing tokens (50-60% chance).
Strategy: Buy the dips in selected altcoins. Avoid high-profile tracks and identify the next 'get-rich-quick' token.
Scenario 3: BTC rises, altcoins generally drop (20-30% chance).
Strategy: Sell all altcoins. Reduce altcoin investments; if the altcoins held do not rise in the long term, they may have to be sold off completely.
Scenario 4: BTC drops, altcoins generally drop. Everything has peaked (10-20% chance).
Due to favorable macro conditions, a new BTC ATH breakout may not take as long as it did in 2024. During this hellish summer, the ETF was just launched, and TradFi is still struggling to sell BTC to customers. 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—indeed, the new regime currently in place has brought new attention to the digital asset space, and now that the next U.S. president frequently discusses Bitcoin, it has become much easier to persuade people to buy Bitcoin.
This regime change is extremely important. Therefore, BTC will continue to maintain a favorable trend in 2025. The situation is similar for altcoins, but with some differences.
Total3 (the total market cap trend of all altcoins) is expected to hit an all-time high in Q1 2024, then peak in Q4 2024. It more or less follows the same pattern (the scenarios above, Scenario 1 and Scenario 2, are not significantly different).
The key lies in positioning and timing. While optimistic about 2025, it's unclear how long it will take. Although the rise in 2025 may come earlier than in 2024, altcoins will still significantly drop during periods without catalysts.
As long as the cycle hasn't ended, whether for Bitcoin or altcoins, stay bullish. 2025 will not see a repeat of the summer of 2024, though there may be periods like now (just a stable period), but prices will still maintain quite good levels.
On-chain situations are different; when the tide recedes, on-chain can easily see a 70% drop. Altcoins are not expected to peak at this time, as it's unclear how BTC can continue to rise while altcoins 'die,' nor can one see BTC peaking here.
Conclusion:
BTC rises, with gains exceeding those of 2024
Altcoins are in an upward trend, although there will be declines, they will not be as severe as in 2024.
Risks
Cycle peak
Currently far from the cycle peak, but must be reassessed weekly. The cycle peak is not necessarily an 'event,' but more like a range that slowly approaches over time.
Bitcoin reserve plan risks
With the new presidential term starting, all eyes will be on Trump's words and actions. While there is potential good news for Bitcoin, it would be quite pessimistic if Trump completely ignores the reserve plan. A more likely scenario is that the reserve plan does not happen or is delayed by some factors.
In the latter case: as long as it benefits Bitcoin, it was initially bearish, but eventually a bullish event.
TLDR: Bullish signal = cycle continues. Bearish signal = plans must be modified. The cycle may continue, but the chances are lower.
Supply risks
The summer of 2024 experienced a crazy macro environment, with stock markets hitting new highs. However, due to supply giants like Gox, Grayscale GBTC repeatedly hitting hard, there were no benefits, only drawbacks.
Supply risks can never be alleviated. There are always large holders of Bitcoin—such as 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 buying opportunities.
Macro risks
Expect a small rate cut, although less optimistic, the fact is that as long as interest rates continue to decline, liquidity will improve. Similarly, bullish signal = cycle continues. Unless there are interest rate hikes/no cuts, the macro environment should be favorable for digital assets.
Bearish signal is inflation rising again, and the Fed may have to raise rates to curb inflation.
Token recommendations
1. AI
Several waves have already been experienced. The next wave is expected to arrive soon. Buying and holding won't yield good results. Goat, the token that initiated all of this, has dropped 60% from its peak and may continue to perform poorly.
Preferred: Application technologies / Swarms / Gaming / Consumer-centric AI
ALCH (game development), Griffain (helps control wallets), 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, significant gains may not occur.
Frankly, in terms of risk-reward, DeFi is not a preferred choice.
Preferred: AAVE / ENA / Morpho / Euler / USUAL
Alternative: Stablecoins / Payment-related tokens
3. L1
L1 will make a comeback. Clearly, Hype. L1 itself is something the market has always overlooked—it is one of the areas with little attention but holds great opportunities (as Hype grows tenfold).
Preferred: SUI / Hype
Alternative: Abstract
4. NFT tokens and gaming tokens
The NFT token space is worth watching. PENGU is slowly recovering, Azuki has ANIME tokens, Doodles have... whatever. NFTs are not expected to revive, but their tokens will return. Moreover, digging deep to find interesting games with upcoming tokens is an intriguing task.
Preferred: Pengu / Anime (Azuki) / Spellborne / Treeverse
Alternative: Prime / Off the grid (if tokens launch) / Overworld
5. Other narratives
Data tokens: Kaito / Arkm
Meme: PEPE
DePIN: PEAQ / HNT
Ordinals
Old DeFi: CRV / CVX
2025 Forecast
DePIN will be implemented by a company in some way, perhaps through an acquisition.
Binance will lose market share as the largest exchange. Not from Hyperliquid, but from Bybit / OKX.
With new advances in VR, metaverse tokens gain new life.
ICOs are great again.
ETH chain altcoin season will not happen.
Sui reaches double digits (at least $10).
Ethereum ETF staking gets approved, leading to more yield products for staking other tokens and yield aggregators.
A major artist uses NFTs and tokens to engage and reward fans.
Bitcoin reaches $200,000.
More CEOs/founders of L1 institutions leave their original companies after seeing the departure of Aptos Labs CEO (PANews note: On December 20, Aptos Labs co-founder Mo Shaikh resigned 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 up 131% not as good as last year, TVL surges 21 times to over $6.7 billion.
