Author: Bitcoin Magazine Pro
Bitcoin did not experience an explosive start in 2025 as many expected. After breaking through $100,000, there was a significant pullback, and investors and analysts began to question our position in the overall Bitcoin cycle.
This article will cut through market noise, delve into a series of key on-chain data and macro indicators to assess whether Bitcoin's bull market remains intact or faces a deeper correction.
01
Healthy Correction or Cycle Termination?
A good starting point is the MVRV-Z score, a long-used valuation indicator comparing market value to realized value. After reaching a peak of about 3.36, the MVRV-Z score has dropped to around 1.43, coinciding with Bitcoin's decline from over $100,000 to a low of $75,000. At first glance, this 30% pullback seems severe.
Figure 1: The MVRV Z score has recently rebounded from the 2025 low of 1.43.
Historically, periods with MVRV-Z scores similar to the current level often mark local bottoms, not tops. Previous cycles, including 2017 and 2021, experienced similar pullbacks, after which prices recovered. In short, although this decline has shaken investor confidence, it is consistent with historical corrections during bull markets.
02
Focus on Smart Money
Another key indicator is the Value Days Destroyed (VDD) multiple. This indicator measures Bitcoin's movement speed, weighted by the time coins are held. VDD multiple peaks typically indicate experienced holders taking profits, while low levels suggest accumulation.
Currently, the indicator is at a low in the "green zone," similar to levels seen in the late bear market or early recovery phase. Given the sharp reversal from over $100,000, we may be witnessing the end of a profit-taking wave, with signs of long-term accumulation reappearing, suggesting expectations of higher prices.
Figure 2: The current VDD multiple indicates long-term holders are in an accumulation phase
The Bitcoin Cycle Capital Flow chart is one of the most insightful on-chain data charts, breaking down capital flow by coin age. It distinguishes between different groups, such as new market participants (holding less than 1 month) and medium-term holders (1-2 years), to observe capital migration. When Bitcoin reached its peak of $106,000, the red band (new holders) saw a surge in activity, indicating FOMO-driven buyers rushing in near the top. Since then, this group's activity has significantly cooled down, returning to levels consistent with the early to mid-bull market.
Conversely, the 1-2 year holder group (typically macro-savvy accumulators) has begun to rise again. This inverse correlation is crucial: long-term holders accumulate at market lows, while newer participants surrender or exit at lows. These dynamics are similar to the accumulation-distribution patterns of earlier bull market cycles, especially in 2020 and 2021.
Figure 3: Bitcoin Cycle Capital Flow chart shows Bitcoin flowing to more experienced holders
03
What Stage Are We In?
From a macro perspective, we divide the Bitcoin market cycle into three key stages:
Bear Market Stage: Deep correction (70-90%)
Recovery Stage: Reclaiming previous highs
Bull Market/Exponential Stage: Parabolic rise after breaking previous highs
Bear markets in 2015 and 2018 lasted about 13-14 months. Our recent bear market cycle also lasted 14 months. Previous recovery stages lasted about 23-26 months, and our current cycle is within this time window.
Figure 4: Estimating potential bull market peak using past cycle trends
However, this bull market stage is somewhat unusual. After breaking the historical high, prices did not immediately surge but instead pulled back. This may indicate that we are only forming a higher low before entering the steeper part of the exponential stage. If we take the average of 9 and 11 months from the exponential stages of past cycles, the bull market is expected to peak around September 2025, provided the bull market stage recovers.
04
Macro Risks
Despite encouraging on-chain data, macro headwinds remain. Analysis of the S&P 500 and Bitcoin correlation chart shows that Bitcoin remains highly correlated with the U.S. stock market. As fears of a global economic recession intensify, continued weakness in traditional markets may limit Bitcoin's upside potential in the short term.
Figure 5: Bitcoin's correlation with the U.S. stock market
05
Summary
As we've seen in our analysis, key on-chain indicators like MVRV Z score, Value Days Destroyed, and Bitcoin Cycle Capital Flow show healthy, cycle-consistent behavior and signs of long-term holder accumulation. However, significant macro uncertainty remains in the market, which is a key risk to watch.
This cycle is slower and less uniform than previous cycles but has not broken historical structures. If traditional market conditions do not further deteriorate, Bitcoin appears poised for the next wave of growth, potentially peaking in the third or early fourth quarter.
Article link: https://www.hellobtc.com/kp/du/04/5751.html
Source: https://mp.weixin.qq.com/s/CGpbQeRBvR3Wcp0EPOHGqA
