Bitcoin has once again reached an all-time high. Will the bull market cycle be repeated?

Author: ChandlerZ, Foresight News

On May 22, 2025, the Bitcoin price surged and exceeded USDT by 110,000 USDT, setting a new record for the historical high of 109,599 USDT on January 20. This scene reminds people of the clip from November 2021. At that time, Bitcoin fell rapidly after briefly crossing the high of the beginning of the New Year, and since then it started a long and profound bear market cycle. Now the market seems to be pushed to the turning point of fate again: should we break through again and open up a new round of upward space, or should we fall into a double-top market after the "false breakthrough" and finally usher in a deep pullback?

This is a problem that Bitcoin cannot avoid whenever it approaches its historical high. In the past few bull markets, we have repeatedly seen similar structures: the climax is coming, the market sentiment is excited, and discussions about "whether the vertices of the cycle have arrived" have come one after another. In this round, although the upward trend and rhythm are still vaguely familiar, the deeper market structure has changed significantly.

Prices are repeating, but the market is no longer yesterday. Against this background, do we continue to believe that the "period law" brought about by halving still dominates the fate of Bitcoin? Or should we admit that a new rhythm has quietly unfolded in ETF funds, on-chain structure and macro narrative?

Back to the most essential observation method, perhaps the data on the chain, the mirror image of history, and the traces of behavior can still provide us with some periodic inspiration. Is the current wave of rise the last sprint of cycle inertia, or a new starting point after reconstructing the cycle structure? Perhaps the answer is hidden in the context of data.

Is the market repeating historical paths?

Although the historical price trend of Bitcoin fluctuates violently, it can be roughly divided into the following typical cycles of "halving drive + bull and bear rotation":

Since 2011, Bitcoin’s price has been repeatedly evolved with the logic of “halving drive—imbalance of supply and demand—explosion of bull market—top pullback”, and each cycle ends with a higher price peak. The double-top structure in 2021 is undoubtedly the most vigilant lesson.

Bitcoin hit a temporary high for the first time in April 2021. At that time, it was driven by multiple positive factors such as the positive impact of Coinbase's listing, the continued monetary policy of loosening, and the continued absorption of grayscale GBTC. The market sentiment was high and the price exceeded the $60,000 mark for the first time. But this high did not last long. After entering May, as the Federal Reserve released forward signals of balance sheet shrinking and interest rate hikes, coupled with the policy risks of China's large-scale clearance of domestic mines, the Bitcoin market quickly fell into a correction, falling to around $30,000 in less than three months, completing a deep adjustment in the central region.

A few months later, the market gradually digested negative emotions and bottomed out and rebounded in late summer. Driven by positive narratives and capital inflows such as Salvador officially enacted Bitcoin as a fiat currency, some investors regarded it as a potential hedge tool with increased global inflation concerns, and driven by positive narratives and strong optimism about the approval of the first Bitcoin futures ETF in the United States, the rise regained and briefly surged to an all-time high of about $69,000 on November 10, and then quickly fell back, forming a clear, months-spanning "double-top structure" with the high in April.

Ultimately, this triple resonance of price hitting new highs, active chain fulfillment and shrinking demand constitutes a typical "false breakthrough" pattern. Bitcoin fell back quickly after briefly reaching the top, opening a downward cycle. This structure appears as a "local high + volume divergence + instantaneous reversal" in terms of technical form. It is a typical double-top top signal and also provides an important lesson for the current stage of the market approaching historical highs.

Will history converge?

The slope and pattern of the current trend are quite similar to the eve of November 2021. What is more worth noting is that multiple indicators on the chain are sending out signals of structural convergence.

The latest data shows that the MVRV of long-term holders has climbed to 3.3, approaching the "greedy red zone" defined by Glassnode (above 3.5); the MVRV of short-term holders has also risen sharply from the low of 0.82 to 1.13, meaning that most short-term funds in the market have re-entered the floating profit range. From a behavioral financial perspective, this structural change is a necessary condition for forming top pressure: when the vast majority of investors return to the surplus state, the desire to fulfill it will often increase simultaneously.

However, if we analyze from the perspective of "seller behavior pressure" in the on-chain structure, although the sell-side risk ratio of short-term investors has shown a significant increase, indicating that some profit release actions have been made on the chain, the overall value is still at a historically medium and low level. This state reflects that although investor sentiment has heated up and some funds choose to stop profit in the floating profit range, the overall market has not yet entered an imbalance dominated by "collective realization momentum".

This means that although the upward space has been initially suppressed, the market has not lost control. As long as subsequent liquidity continues to stabilize, the market still has the conditions to continue a structural upward trend, and it has not been pushed to the ultimate top.

In general, long-term holders' behavior has always been the most reliable slow variable signal in Bitcoin cycle judgment. Whether in 2013, 2017 or 2021, the end of every big bull market is almost accompanied by concentrated distribution by such investors, and the new bull market cycle often begins with their re-absorbing.

The current round of market has entered the fifth major cycle of Bitcoin. If long-term holders have not started a new round of positions replenished, this may mean that the market is still in the top area, or is still building a high-level double-top structure.

What is the future trend?

According to the calculation method of on-chain analyst @Murphychen, that is, use BTC's MVRV to evaluate, because MVRV essentially represents the relationship between funds and costs.

Bitcoin has always followed the principle of large-level divergence between MVRV and spot prices for more than ten years, that is, once there is a divergence between higher prices but lower MVRV, the subsequent indicators cannot break through the previous high, and the price space will be suppressed.

The logic behind this is that as the cost of turnover becomes higher and higher, an exponential increase in capital is required to continue to push the price to higher.

The highest point of this round of MVRV appeared on March 11, 2024, with BTC price of US$72,000 and MVRV 2.78; since then, even though the BTC price hit a new high on December 17 or January 21, MVRV has never exceeded 2.78.

Therefore, in this round of BTC, the first and most important step toward the sea of ​​stars, is to break the large-level divergence of MVRV. Based on the current RP dynamic value, the BTC price is required to exceed US$125,500.