Author: Bitcoin Magazine Pro
Compiled by: Bai Hua Blockchain
As we move into 2025, it's time to take a rational and analytical look at the potential landscape that Bit may face this year. By combining on-chain data, market cycles, macroeconomic data and other factors, we can go beyond mere speculation and paint a data-driven picture of the coming months.
1. MVRV Z-Score: Massive Upside Potential
The MVRV Z-Score measures the ratio between Bit's realized price (the average purchase price of all Bit in the network) and its market capitalization. By standardizing this ratio for volatility, we get the Z-Score, an indicator that has historically been able to clearly reflect the market cycle trend.
Figure 1: The MVRV Z-Score shows we still have a long way to go before reaching the market cycle peak
Currently, the MVRV Z-Score indicates that we still have significant upside potential. While the Z-Score has exceeded 7 in past cycles, I believe any value above 6 signals market over-extension and requires closer observation of the market peak in conjunction with other indicators. Our current level is comparable to May 2017 - when Bit's price was only a few thousand dollars. In the historical context, there is still hundreds of percentage points of potential upside from the current level.
2. Pi Cycle Oscillator: Bullish Momentum Recovering
Another key indicator is the Pi Cycle top and bottom indicator, which tracks the 111-day and 350-day (the latter multiplied by 2) moving averages. Historical data shows that when these two moving averages cross, it usually signals that Bit's price will reach a peak within a few days.
Figure 2: The macro trend remains bullish
The distance between these two moving averages is starting to rise again, indicating that bullish momentum is recovering. Although 2024 saw several consolidation periods, the current breakout suggests that Bit is entering a stronger growth phase that could last for months.
3. The Exponential Growth Phase of the Cycle
Looking at Bit's historical price trends, cycles typically last 6 to 12 months in the "post-halving cooling" phase, then enter an exponential growth phase. Based on past cycle data, we are approaching this breakout point. While the returns may be lower compared to earlier cycles, we could still see significant gains.
Figure 3: Compared to past bull market cycles, we are approaching the most bullish phase of the cycle
For context, in the 2020 cycle, after breaking above the previous all-time high of $20,000, Bit's price reached a peak of nearly $70,000, a 3.5x increase. If we see a conservative 2x or 3x growth over the previous peak of $70,000, Bit could realistically reach $140,000 to $210,000 this cycle.
4. Macroeconomic Factors Supporting Bit's Performance in 2025
Despite facing some headwinds in 2024, Bit has remained strong, even as the US Dollar Index (DXY) has strengthened. Historically, Bit's performance has typically been inversely correlated with the DXY, so if the DXY sees a reversal, it could further drive Bit's upside.
Figure 4: Bit has continued to rise even as the US Dollar Index has surged
Other macroeconomic indicators, such as the high-yield credit cycle and global M2 money supply, suggest that the market environment for Bit 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. The Cycle Macro: Still a Long Way to Go
The Bit cycle macro chart combines multiple on-chain valuation indicators, showing that Bit still has considerable growth potential before reaching over-valuation. The current ceiling is around $190,000, and this ceiling continues to rise, further reinforcing the prospects of sustained upward momentum.
Figure 5: The "over-valuation" level on the cycle macro 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 Bit's best days may still lie ahead, even after an exceptionally positive performance in 2024.
