Despite a significant pullback from its 2025 high of over $100,000 to around $75,000, Bitcoin’s on-chain indicators suggest that the asset may still be in a structurally sound bull market moving into the third quarter of 2025.
Key Metrics Supporting Bullish Sentiment
Analysts are closely monitoring several key blockchain-based indicators to interpret market direction:
- MVRV Z-Score: This metric, which compares Bitcoin’s market cap to the average price at which coins last moved on-chain, dipped to 1.43 during the retracement. Historically, such levels have been associated with cycle bottoms. A recent rebound from this low hints toward renewed upward momentum.
- Value Days Destroyed (VDD) Multiple: Designed to assess investor holding patterns, the VDD shows long-term holders are once again accumulating, reducing profit-taking activity and expressing stronger confidence in Bitcoin’s long-term potential.
- Cycle Capital Flows: Coins aged one to two years show increased on-chain activity—typically reflecting strategic accumulation during price dips, a behavior characteristic of experienced market participants.
Market Behavior and Broader Cycle Structure
The decline in activity among newer market entrants—which often signals the end of impulsive buying phases—is viewed as a stabilizing factor. This behavior shift may help the market transition into a more composed and sustainable growth stage.
Furthermore, Bitcoin’s market evolution remains in line with historical cycles. Past cycles have shown a 23–26 month accumulation and growth phase before explosive price increases. If patterns hold, the exponential phase may arrive later in 2025, with analysts eyeing a potential peak around September.
External Risks Remain
Nonetheless, macroeconomic factors pose potential threats. Bitcoin’s close correlation with U.S. equities means that any significant downturn in global financial markets—especially with rising recession concerns—could influence its short-term prospects, regardless of on-chain strength.
Outlook
Despite varying cycle dynamics compared to previous bull runs, the underlying chain metrics provide a cautiously optimistic outlook. Continued accumulation by veteran holders, reduced FOMO-driven activity, and historical timing cycles suggest that Bitcoin is positioned for further upside—barring major economic disruptions.
For further details, see the original article on Bitcoin Magazine.
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