Bitcoin (BTC) Market Nears Cycle Peak, Enters Latter Stages of Bull Cycle: CryptoQuant Analyst

The cryptocurrency market, spearheaded by Bitcoin, has often cycled through periods of growth and decline, reflecting investor sentiment and market fundamentals.

Since the beginning of the current bull cycle in January 2023, Bitcoin has seen strong gains in both price and market duration. Increased capital inflows from new investors entering the market have fueled this growth, and existing participants are reinvesting their profits.

However, recent indicators suggest that the market may now be entering the latter stages of this cycle, begging the question of what’s next for Bitcoin and the broader crypto market.

Relevant Reading: MARA CEO Advocates “Invest And Forget” Approach To Bitcoin, Citing Strong Historical Performance

Key Indicators Suggest Cautious Optimism

One key metric that supports this observation is the percentage of Bitcoin traded in the past month relative to the realized market cap – UTXO, which currently stands at 36%, according to a recent analysis shared by a CryptoQuant analyst known as Crypto Dan.

In the analysis, Dan reveals that this figure, while lower than peak levels observed in previous bull cycles, is decreasing, suggesting that the market is “progressing toward its cycle peak.”

According to Dan, this peak could come sometime between Q1 and Q2 of 2025. However, rather than a single large wave of peak activity, historical trends suggest that the ratio could experience sharp increases two to four more times before the cycle concludes.

This pattern usually signals overheating in the market, followed by a subsequent correction or bear cycle. Dan further noted that while the market could still see gains, it warrants a conservative approach to risk management.

“Historically, late-stage bull cycles are marked by increased volatility, as profit-taking begins to influence market behavior. Nevertheless, from a conservative standpoint and with risk management in mind, caution is advised. For this reason, I am planning to gradually sell my holdings.”

Another key observation from on-chain data is the relative activity of short-term traders versus long-term holders. Throughout market history, a sharp increase in short-term trading activity often precedes a market correction.

Traders who entered the market during recent price rallies may begin to sell off their holdings, leading to temporary downward pressure on prices. In contrast, long-term holders typically remain strong during these periods, providing a stabilizing force in the market.

Bitcoin Sees Recovery As The New Year Begins

After struggling to remain above $100,000 in the last month of 2024, Bitcoin seems to have resumed bullish momentum as the first month of 2025 begins.

However, BTC entered the new year trading below $95,000. But within days, the asset continued its uptrend, reclaiming the $100,000 price level to trade at a price of $101,624 at the last check.

Over the past 24 hours, BTC recorded a 3.9% gain, bringing its price closer to its recently established all-time high above $108,000 last month.