As we enter 2025, Bitcoin still has significant potential for growth, supported by multiple data indicators and macroeconomic factors. This article is sourced from an article by Bitcoin Magazine Pro and compiled and translated by Blockchain in Plain Language.
With the combination of on-chain data, market cycles, and macroeconomic data, we can go beyond mere speculation and paint a data-driven picture of what the future holds for Bitcoin in the coming months.
1. MVRV Z-Score: Significant Upside Potential
The MVRV Z-Score measures the ratio between Bitcoin’s realized price (the average purchase price of all Bitcoin on the network) and its market value. By standardizing this ratio for volatility, we obtain the Z-Score, an indicator that has historically displayed market cycle trends.
Currently, the MVRV Z-Score indicates that there is still significant upside potential. Although in previous cycles, the Z-Score has exceeded 7, I believe that any value above 6 signifies an overextended market that needs close observation of market peaks in conjunction with other indicators. Currently, our level is equivalent to May 2017, when Bitcoin’s price was only a few thousand dollars. Considering this historical context, there is still several hundred percentage points of potential upside 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 signals that Bitcoin’s price will reach a 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 could last for several months.
3. Exponential Growth Phase of the Cycle
From the historical price trends of Bitcoin, cycles typically last 6 to 12 months in the “cooling-off” phase after halving before entering an exponential growth phase. Based on past cycle data, we are approaching this breakthrough point. While the returns may decrease compared to earlier cycles, we could still see significant gains.
As background information, after surpassing the previous all-time high of $20,000 before the 2020 cycle, Bitcoin reached a peak of nearly $70,000, a 3.5-fold increase. If we conservatively estimate a 2-fold or 3-fold increase from the previous peak of $70,000, Bitcoin could potentially reach $140,000 to $210,000 in this cycle.
4. Macro Factors Supporting Bitcoin’s 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, Bitcoin’s trend has been inversely correlated with the DXY, so if there is a reversal in the strength of the 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 contraction in money supply that occurred in 2024 is expected to reverse in 2025, laying the foundation for a more favorable market environment.
5. Cycle Composite: Still a Long Way to Go
The Bitcoin cycle composite combines multiple on-chain valuation indicators, showing that there is still significant room for growth before reaching overvaluation. Currently, the upper limit is around $190,000, and this upper 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 always, 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.