Interpreting the Bitcoin Trend in 2025 from the Perspective of Data Indicators and Macroeconomics

Original Title: 2025 Bitcoin Outlook: Data-Driven Insights

Original Author: Bitcoin Magazine Pro

Original Translation: Baihua Blockchain

As we enter 2025, it is time to examine the potential scenarios Bitcoin may face this year in a rational and analytical manner. By combining on-chain data, market cycles, macroeconomic data, and other factors, we can move beyond mere speculation and paint a data-driven picture for the coming months.

1. MVRV Z-Score: Huge Upside Potential

The MVRV Z-Score measures the ratio between Bitcoin's realized price (the average purchase price of all Bitcoins in the network) and its market capitalization. By normalizing the volatility of this ratio, we obtain the Z-Score, which historically has clearly illustrated market cycle trends.

Figure 1: The MVRV Z-Score indicates we still have a long way to go before reaching market cycle peaks.

Currently, the MVRV Z-Score suggests that we still have significant upside potential. Although the Z-Score has exceeded 7 in previous cycles, I believe any value above 6 indicates market overextension, requiring closer observation of market peaks in conjunction with other indicators. Our current level is comparable to May 2017—when Bitcoin's price was only a few thousand dollars. Given the historical context, there is still potential for several hundred percentage points of upside from the current level.

2. PiCycle Oscillator: Bullish Momentum Resurgence

Another key indicator is the PiCycle top and bottom indicators, which track the 111-day and 350-day moving averages (the latter multiplied by 2). Historical data shows that when these two moving averages cross, it typically signals that Bitcoin's price will peak within a few days.

Figure 2: The macro trend remains bullish.

The distance between these two moving averages has begun to rise again, indicating that bullish momentum is recovering. Despite experiencing several periods of consolidation in 2024, the current breakout suggests that Bitcoin is entering a stronger growth phase that could last for months.

3. Exponential Growth Phase of the Cycle

From Bitcoin's historical price trends, cycles typically last 6 to 12 months in the "post-halving cooling" phase before entering an exponential growth phase. Based on past cycle data, we are approaching this breakout point. Although the return rates may be lower compared to earlier cycles, we could still see significant gains.

Figure 3: Compared to previous bull market cycles, we are nearing the most bullish phase of the cycle.

As background information, during the 2020 cycle, after breaking the previous all-time high of $20,000, Bitcoin's price peaked near $70,000, representing a 3.5-fold increase. If we conservatively estimate a 2x or 3x growth from the previous peak of $70,000, Bitcoin could realistically reach between $140,000 and $210,000 in this cycle.

4. Macroeconomic Factors Supporting Bitcoin's Performance in 2025

Despite facing some headwinds in 2024, Bitcoin has remained strong, even in the face of a strengthening U.S. Dollar Index (DXY). Historically, Bitcoin's movement has typically been inversely correlated with the DXY, so if the DXY experiences a strong reversal, it could further boost Bitcoin's upside potential.

Figure 4: Even with a significant rise in the Dollar Index, Bitcoin continues to rise.

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

5. Cycle Master Chart: A Long Way to Go

The Bitcoin cycle master chart aggregates multiple on-chain valuation indicators, showing that Bitcoin still has considerable growth potential before reaching overvaluation. The current upper limit is around $190,000, and this upper limit continues to rise, further reinforcing the prospects for sustained upward momentum.

Figure 5: The "overvaluation" level of the cycle master 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 Bitcoin's best days may still lie ahead, even after an exceptionally positive performance in 2024.