The cryptocurrency market has been on a tear since January 2023, with many analysts predicting that this bull cycle will continue well into 2025. However, according to data analytics provider CryptoQuant, caution is advised for investors as the market approaches its cyclical peak.
The Latter Stages of the Bull Cycle
Crypto Dan, a contributor to CryptoQuant, recently noted in a Jan. 6 post that the current bull cycle is likely to reach its cyclical peak by the first quarter of 2025, or at the latest, the second quarter. This prediction is based on various indicators, including the substantial influx of new investments and additional funds from existing investors.
"It is reasonable to expect that the market is now in the latter stages of this cycle," Crypto Dan stated. "With a substantial influx of new investments as well as additional funds from existing investors, it’s likely that we’re seeing the last gasp of this bull cycle."
The Pattern of Prior Market Tops
One indicator that suggests the market may be approaching its peak is the percentage of Bitcoin (BTC) traded for less than one month. In the fourth quarter of 2024, this ratio spiked to 36%, a pattern that resembles prior crypto market tops.
"This ratio is likely to keep rising, potentially increasing by two to four times before correcting at the start of a bear cycle," CryptoQuant noted. "Therefore, expectations for substantial gains in both Bitcoin and altcoins should still be kept open."
Contrasting Views
While CryptoQuant’s cautionary note stands out from the crowd, most analysts are predicting a continued bull run through the end of 2025, potentially correcting in the fourth quarter.
Analysts at Steno Research expect 2025 to be crypto’s best year ever, with BTC and Ether (ETH) both crushing all-time highs. Among other potential "remarkable positive developments" they mention:
- BTC and ETH reaching new heights: With a projected value of around $180,000 for Bitcoin and above $6,000 for Ethereum at the cycle’s apex.
- New types of crypto exchange-traded funds (ETFs): The United States is expected to greenlight several new types of ETFs, which could further fuel the bull run.
- Establishment of a strategic Bitcoin reserve: Some analysts predict that the US will establish a strategic Bitcoin reserve, further increasing demand for the cryptocurrency.
Market Expectations
Traders on betting markets Polymarket and Kalshi also expect BTC and ETH to hit record highs in 2025. They anticipate:
- Record-breaking prices: With some traders predicting prices of $200,000 or more for Bitcoin and $10,000 or more for Ethereum.
- Increased demand for ETFs: As the US is expected to greenlight several new types of crypto exchange-traded funds (ETFs).
- Establishment of a strategic Bitcoin reserve: Some analysts predict that the US will establish a strategic Bitcoin reserve, further increasing demand for the cryptocurrency.
Conclusion
While some analysts are predicting a continued bull run through the end of 2025, caution is advised for investors as the market approaches its cyclical peak. The percentage of BTC traded for less than one month has spiked to 36%, a pattern that resembles prior crypto market tops.
Investors should remain cautious and consider managing their risk exposure as the market continues to rise. While it’s still possible to expect substantial gains in both Bitcoin and altcoins, investors should be prepared for the potential correction at the start of a bear cycle.
Additional Reading
- How Crypto Laws are Changing Across the World in 2025: Learn about the latest developments in crypto regulations around the world.
- Cryptocurrency Market Outlook 2025: Get critical insights to spot investment opportunities, mitigate risks, and refine your trading strategies. Delivered every Monday.
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