Bitcoin’s current bull cycle, which began in January 2023, has seen substantial price increases and market growth. However, recent analysis suggests that the market may be entering the final stages of this cycle, prompting speculation on what lies ahead for investors.
Key signals indicate late bull cycle
One crucial indicator pointing to a late phase is the realized market cap – UTXO ratio. According to CryptoQuant analyst Crypto Dan, this percentage is currently at 36%. While lower than the peak levels seen in previous bull cycles, the decreasing trend suggests that the market is “heading toward the peak of the cycle.”
Dan anticipates this peak to occur sometime between the first and second quarters of 2025. He notes, however, that the market is unlikely to experience an explosive surge but rather multiple short-term increases before the cycle concludes. This pattern typically indicates a market overheating, which may be followed by a correction or the onset of a new bear cycle.
He advises investors to proceed with caution as late bull cycles often come with increased volatility and profit-taking, which can impact the market significantly. “From a conservative standpoint and with risk management in mind, caution is warranted,” wrote Dan, indicating that he is gradually starting to sell his holdings.
Tension between short and long term traders
Another crucial observation is the interaction between short-term traders and long-term holders. Historically, a rise in short-term activity often precedes a correction. While short-term traders realize their profits, long-term holders usually remain in the market, providing stability during times of increased volatility.
Bitcoin regains momentum in 2025
After a challenging December in 2024, where Bitcoin remained below the $100,000 mark, the largest cryptocurrency has resumed its upward trend. Entering 2025, the price briefly dropped below $95,000, but now Bitcoin has broken the $100,000 barrier once again and currently trades around $101,624. This marks a 3.9% increase over the last 24 hours, with the prospect of re-approaching the all-time high of $108,000 reached in December 2024.
