As we enter 2025, Bitcoin still has significant upward potential supported by multiple data indicators and macroeconomic factors. This article, sourced from Bitcoin Magazine Pro and compiled and translated by Block Chain in Plain Language, takes a rational and analytical approach to examine the possible situation Bitcoin may face this year. By integrating on-chain data, market cycles, and macroeconomic data, we can go beyond mere speculation and paint a data-driven picture for the coming months.
1. MVRV Z-Score: Significant upside potential
The MVRV Z-Score measures the ratio between the realized price of Bitcoin (the average purchase price of all Bitcoins on the network) and its market value. By standardizing this ratio’s volatility, we obtain the Z-Score, which has historically shown clear trends in market cycles.
Currently, the MVRV Z-Score indicates that there is still significant upside potential. Although the Z-Score has exceeded 7 in past cycles, I believe any value above 6 signifies an overextended market that requires careful observation of market peaks in conjunction with other indicators. Our current level is comparable to May 2017 when Bitcoin was priced at only a few thousand dollars. Considering historical context, there is still a potential increase of several hundred percentage points from current levels.
2. PiCycle Oscillator: Bullish momentum recovery
Another key indicator is the PiCycle top 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 indicates that the Bitcoin price will reach its peak within a few days.
The distance between these two moving averages is starting to rise again, indicating a recovery in bullish momentum. Despite experiencing several consolidation phases in 2024, the current breakout suggests that Bitcoin is entering a stronger growth phase that may last for several months.
3. Phases of exponential growth
Looking at the historical price trend of Bitcoin, the cycle usually continues in a “cooling-off period after halving” phase for 6 to 12 months before entering an exponential growth phase. Based on previous cycle data, we are approaching this breakthrough point. Although the returns may decrease compared to earlier cycles, we may still see significant gains.
As background information, after breaking the previous all-time high of $20,000 before the 2020 cycle, the Bitcoin price reached a peak of nearly $70,000, a growth of 3.5 times. If we conservatively estimate a growth of 2 to 3 times from the previous peak of $70,000, Bitcoin could potentially reach $140,000 to $210,000 within this cycle.
4. Macro factors supporting Bitcoin performance in 2025
Despite facing some resistance in 2024, Bitcoin has remained strong, even in the face of a strengthening U.S. dollar index (DXY). Historically, the trend of Bitcoin and DXY has been inversely related, so if there is a reversal in the strength of DXY, it could further drive Bitcoin’s upward potential.
Other macroeconomic indicators, such as high-yield credit cycles and global M2 money supply, indicate an improving market environment for Bitcoin. The monetary supply contraction seen in 2024 is expected to reverse in 2025, laying the foundation for a more favorable market environment.
5. Cycle Master Chart: Still a long way to go
The Bitcoin Cycle Master Chart combines multiple on-chain valuation indicators, indicating that Bitcoin still has significant room for growth before reaching overvaluation. Currently, the upper limit is around $190,000, and this limit continues to rise, further strengthening the prospects for continued upward momentum.
6. Conclusion
Currently, almost all data indicators point to a bullish 2025. As usual, past performance does not guarantee future results, but the data strongly suggests that Bitcoin’s best days may still lie ahead, even after its exceptional performance in 2024.