By: Bitcoin Magazine Pro
Compiled by: Vernacular Blockchain
As we head into 2025, it’s time to take a rational and analytical look at what the year may hold for Bitcoin. By combining multiple factors, including on-chain data, market cycles, macroeconomic data, and more, we can go beyond pure speculation and 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 this ratio by volatility, we get the Z-Score, which has historically been able to clearly show the trend of market cycles.
Figure 1: MVRV Z-Score shows we are still a long way from the market cycle peak
Currently, the MVRV Z-Score suggests that we still have significant upside potential. Although Z-Scores have exceeded 7 in previous cycles, I believe that any value above 6 indicates that the market is overextended and needs to be watched more closely in conjunction with other indicators for market peaks. Currently, we are at levels comparable to May 2017 - when Bitcoin was only a few thousand dollars. To put this in historical context, there is still a potential upside of several hundred percentage points from current levels.
2. PiCycle Oscillator: Bullish momentum resumes
Another key indicator is the PiCycle Tops 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 usually signals that Bitcoin prices will peak within a few days.
Figure 2: Macro Trend Remains Bullish
The distance between the two moving averages is starting to rise again, suggesting that bullish momentum is resuming. Despite several bouts of range-bound consolidation in 2024, the current breakout suggests that Bitcoin is entering a stronger growth phase that could last for several months.
3. Exponential growth phase of the cycle
Judging from Bitcoin's historical price action, cycles usually 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 approaching this breakout point. Although returns may be lower than in earlier cycles, we may still see significant gains.
Figure 3: Compared to previous bull cycles, we are approaching the most bullish phase of the cycle
For context, after breaking the previous all-time high of $20,000 in the 2020 cycle, the Bitcoin price peaked at nearly $70,000, a 3.5x increase. If we see a conservative 2x or 3x increase from the previous peak of $70,000, Bitcoin could realistically reach $140,000 to $210,000 in this cycle.
4. Macro factors supporting Bitcoin’s performance in 2025
Despite some headwinds in 2024, Bitcoin has remained strong, even as the U.S. Dollar Index (DXY) strengthens. Historically, Bitcoin and DXY have often moved in opposite directions, so a reversal in DXY strength could further drive Bitcoin’s upside.
Figure 4: Bitcoin rose even as the U.S. dollar index rose sharply
Other macroeconomic indicators, such as the high-yield credit cycle and global M2 money supply, suggest that market conditions for Bitcoin are improving. The money supply contraction seen in 2024 is expected to reverse in 2025, setting the stage for a more favorable market environment.
5. Cycle main chart: There is still a long way to go
The main Bitcoin cycle chart brings together multiple on-chain valuation indicators, showing that Bitcoin still has considerable room to grow before reaching overvaluation. Currently, the upper limit is around $190,000, and this upper limit continues to rise, further strengthening the prospect of continued upward momentum.
Figure 5: The “overvaluation” level of the cycle main chart has exceeded $190,000
6. Conclusion
Currently, almost all data indicators point to a bullish 2025. As always, past performance is no guarantee of future results, but the data strongly suggests that Bitcoin’s best days may still be ahead, even with 2024 already performing exceptionally positive.
