As we enter 2025, it’s time to take a measured and analytical approach to what the year may hold for Bitcoin. By taking into account the chain, market cycle, macroeconomic data and more regarding the confluence, we can go beyond pure speculation to paint a data-driven picture for the coming months.
MVRV Z-Score: Lots of positive potential
The MVRV Z-Score measures the ratio between Bitcoin’s realized price (the average acquisition price of all BTC on the network) and its market capitalization. Standardizing this ratio for volatility gives us the Z-Score, which historically provides a clear picture of market cycles.
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Currently, MVRV’s Z-Score suggests we still have significant upside potential. While previous cycles have seen the Z-Score reach values above 7, I believe that anything above 6 indicates overextension, prompting a closer look at other metrics to identify a market peak. We are currently at levels comparable to those of May 2017, when Bitcoin was valued at just a few thousand dollars. Given the historical context, there is room for potential gains of several hundred percentage points from current levels.
The Pi Cycle Oscillator: Bullish momentum resumes
Another essential metric is the Pi Cycle Top and Bottom indicator, which tracks the 111-day and 350-day moving averages (the latter multiplied by 2). Historically, when these averages cross, it often signals a spike in Bitcoin’s price within a few days.
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The distance between these two moving averages has started to trend upwards again, suggesting renewed bullish momentum. While 2024 saw periods of sideways consolidation, the breakout we are seeing now indicates that Bitcoin is entering a stronger growth phase, which could last several months.
The exponential phase of the cycle
Looking at Bitcoin’s historical price performance, cycles often feature a “post-halving cooldown” that lasts 6-12 months before entering a phase of exponential growth. Based on previous cycles, we are approaching this breaking point. While diminishing returns are expected compared to previous cycles, we could still see substantial gains.
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For context, breaking the previous all-time high of $20,000 in the 2020 cycle led to a peak near $70,000, a 3.5x increase. If we see even a conservative 2x or 3x from the last $70,000 peak, Bitcoin could realistically reach $140,000-210,000 this cycle.
Macro factors supporting BTC in 2025
Despite headwinds in 2024, Bitcoin has performed strongly, even as the US dollar index (DXY) strengthens. Historically, Bitcoin and the DXY move inversely, so any reversal in DXY strength could further fuel Bitcoin’s rally.
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Other macroeconomic indicators, such as high-yield credit cycles and global M2 money supply, suggest improving conditions for Bitcoin. The money supply contraction observed in 2024 is expected to reverse in 2025, setting the stage for an even more favorable environment.
Main Cycle Chart: A long way to go
The Bitcoin Cycle Master Chart, which aggregates several on-chain valuation metrics, shows that Bitcoin still has considerable room to grow before reaching overvaluation. The upper limit, currently around $190,000, continues to rise, strengthening the prospects of sustained bullish momentum.
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Conclusion
Currently, almost all data is aligned for a bullish 2025. As always, past performance does not guarantee future results, however the data strongly suggests that Bitcoin’s best days may still be ahead, even after an incredibly strong 2024.
For a more in-depth look at this topic, watch a recent YouTube video here: Bitcoin 2025: A data-driven outlook
For more detailed Bitcoin analysis and access to advanced features like real-time charts, custom indicator alerts, and in-depth industry reports, check out Bitcoin Magazine Pro.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your research before making any investment decisions.