Author: Matt Crosby, Bitcoin Magazine; Compiled by: Five Baht, Golden Finance

As we enter 2025, it’s time to take a cautious approach to predicting Bitcoin’s trend this year. Taking into account factors such as on-chain data, market cycles, macroeconomic data, and more, we can move beyond pure speculation and paint a data-driven picture of the coming months.

MVRV Z-Score: Huge Upside Potential

The MVRV Z-Score measures the ratio between Bitcoin’s actual price (the average acquisition price of all BTC on the network) and its market capitalization. Normalizing this ratio to volatility yields the Z-score, which historically provides a clear reflection of market cycles.

Figure 1: MVRV-Z scores show we are still a long way from the peak of the market cycle.

Currently, the MVRV Z-score suggests we still have significant upside potential. While Z-scores have reached above 7 in previous cycles, I believe any score above 6 indicates overextension, prompting us to look more closely at other indicators to determine the market peak. Currently, we are hovering at levels comparable to May 2017 – when Bitcoin was worth just a few thousand dollars. Given the historical context, there is room for potential gains of hundreds of percentage points from current levels.

PI Cycle Oscillator: Bullish Momentum Restored

Another important indicator is the Pi Cycle Tops and Bottoms indicator, which tracks the 111-day and 350-day moving averages (the latter multiplied by 2). Historically, when these averages cross, it usually signals a Bitcoin price peak within a few days.

Figure 2: The macro trend remains bullish.

The distance between these two moving averages is starting to trend upward again, indicating that bullish momentum has returned. While 2024 has seen a period of sideways consolidation, the breakout we are seeing now suggests that Bitcoin is entering a stronger phase of growth that may last for several months.

The exponential phase of the cycle

Judging from the historical price trend of Bitcoin, the cycle usually has a "post-halving cooling-off period" lasting 6-12 months, and then enters the exponential growth phase. Based on previous cycles, we are approaching this breakout point. While earnings are expected to be lower compared to previous cycles, we could still see substantial growth.

Chart 3: Compared to previous bull markets, we are approaching the most bullish phase of the cycle.

For context, the all-time high above $20,000 during the 2020 cycle caused Bitcoin prices toThe price peaked at nearly $70,000, a 3.5-fold increase. If we see a 2x or 3x increase in Bitcoin price from the previous peak of $70,000, then Bitcoin has the potential to reach $140,000-210,000 during this cycle.

Macro Factors Supporting BTC in 2025

Despite facing headwinds in 2024, Bitcoin is performing strongly, even as the U.S. Dollar Index (DXY) strengthens. Historically, Bitcoin and DXY move in opposite directions, so any reversal in DXY strength could further fuel Bitcoin's gains.

Figure 4: BTC rises even as DXY surges higher.

Other macroeconomic indicators, such as the high-yield credit cycle and global M2 money supply, suggest that conditions for Bitcoin are improving. The money supply contraction seen in 2024 is expected to reverse in 2025, setting the stage for a more favorable environment.

Cycle Main Chart: There is a long way to go

The Bitcoin Cycle Main Chart summarizes multiple on-chain valuation indicators, showing that Bitcoin still has considerable room for growth before reaching overvaluation. The cap is currently around $190,000 and continues to rise, strengthening the prospects for continued upward momentum.

Figure 5: Cycle Master's "overvalued" level has exceeded $190,000.

Summary

Currently, almost all data points are bullish for 2025. As always, past performance is no guarantee of future results, but the data suggests that even after an incredibly positive 2024, Bitcoin’s best days may still be yet to come.