Bitcoin’s journey in 2025 has been far from the explosive rally many investors anticipated. After briefly surging past $100,000, prices pulled back sharply, triggering widespread speculation about whether this correction signals the end of the current bull market or merely a healthy pause before the next leg up. To cut through the noise, we’ll examine key on-chain and macroeconomic indicators that reveal where Bitcoin stands in its broader market cycle.
Understanding Bitcoin’s position within its historical price patterns is essential for informed decision-making. By analyzing metrics like the MVRV-Z Score, Value Days Destroyed (VDD) Multiple, and Bitcoin Cycle Capital Flows, we can identify whether long-term holders are accumulating or exiting—and what that means for future price action.
Healthy Pullback or End of the Bull Run?
One of the most reliable valuation tools in Bitcoin analysis is the MVRV-Z Score, which compares Bitcoin’s market value to its realized value. This metric helps identify overbought and oversold conditions across market cycles.
In early 2025, the MVRV-Z Score peaked near 3.36 before dropping to approximately 1.43—coinciding with BTC’s decline from over $100,000 to around $75,000. While a 30% retracement may seem alarming, historical context provides reassurance.
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Levels around 1.4–1.6 have historically marked temporary bottoms during prior bull markets—not cycle tops. Both the 2017 and 2021 cycles saw similar pullbacks before resuming strong upward momentum. This suggests that rather than signaling a bear market reversal, the current correction aligns with normal consolidation behavior in mature bull phases.
Moreover, recent data shows the MVRV-Z Score rebounding from its low, indicating renewed investor confidence and potential stabilization at higher price levels.
Smart Money Moves: Who’s Buying and Selling?
To understand market sentiment beyond price action, we turn to the Value Days Destroyed (VDD) Multiple—a metric that measures transaction velocity weighted by coin age. High VDD spikes often indicate profit-taking by long-term holders ("smart money"), while sustained low readings suggest accumulation.
Currently, the VDD Multiple sits deep in the “green zone,” a range typically associated with late bear market or early recovery phases. Given Bitcoin’s recent peak and pullback, this likely reflects the tail end of profit-taking by early investors, followed by renewed accumulation.
Even more telling is the Bitcoin Cycle Capital Flows chart, which tracks capital movement by holder cohort based on coin age:
- New entrants (<1 month holdings): This group surged near the $106,000 high, indicating strong FOMO-driven buying at the top.
- Mid-term holders (1–2 years): After a period of reduced activity, this cohort has begun increasing their positions again.
This inverse relationship—new buyers exiting while experienced holders accumulate—is a classic hallmark of healthy market cycles. It mirrors patterns seen in 2020–2021 when institutional and macro-savvy investors used volatility as an entry point.
These dynamics suggest we’re not witnessing a capitulation but rather a transfer of supply from weak hands to strong ones—a necessary phase before the next major price surge.
Mapping the Current Market Phase
Bitcoin’s market cycle can be broadly divided into three stages:
- Bear Phase: Characterized by deep drawdowns (70–90%) and prolonged consolidation.
- Recovery Phase: Defined by reclaiming all-time highs and rebuilding momentum.
- Bull/Exponential Phase: Marked by parabolic price increases after ATH reclamation.
Historically, bear markets last about 13–14 months. The most recent downturn followed this pattern almost exactly. The recovery phase in past cycles lasted 23–26 months—placing us right within that window today.
While this cycle has felt slower and more volatile than previous ones, it hasn’t deviated from historical structure. Instead of an immediate parabolic rise post-ATH, Bitcoin experienced a corrective phase—possibly forming a higher low before entering the steep ascent of the exponential phase.
If we average past exponential phase durations (9–11 months), a potential peak could occur around September 2025, assuming bullish momentum resumes.
Macro Risks: Can Bitcoin Decouple?
Despite encouraging on-chain signals, macroeconomic factors remain a wildcard. One critical concern is Bitcoin’s ongoing correlation with U.S. equities, particularly the S&P 500.
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Data shows Bitcoin still moves in tandem with traditional risk assets. With growing fears of a global recession and uncertain central bank policies, continued weakness in equity markets could delay or dampen BTC’s next rally.
However, there are signs Bitcoin is gradually decoupling. Increased adoption as a reserve asset by corporations and nations, along with structural improvements in liquidity and infrastructure, may allow BTC to outperform in future risk-off environments.
Frequently Asked Questions (FAQ)
Q: Is Bitcoin still in a bull market after dropping from $100K?
A: Yes. Historical comparisons show that corrections of 30% or more are common during bull markets. On-chain data suggests accumulation by long-term holders, supporting the idea that this is a healthy pullback rather than a trend reversal.
Q: What does the MVRV-Z Score tell us about current valuation?
A: At ~1.43, the MVRV-Z Score indicates Bitcoin is neither overvalued nor undervalued. It aligns with mid-cycle levels seen before strong rallies in prior cycles.
Q: How do we know if “smart money” is buying?
A: Metrics like declining VDD and rising activity among 1–2 year holders signal accumulation by experienced investors—often a precursor to major price moves.
Q: Could macroeconomic issues stop Bitcoin’s rally?
A: Yes. While on-chain fundamentals are strong, Bitcoin remains sensitive to equity markets and global risk sentiment. A major recession could delay the next leg up.
Q: When might Bitcoin reach its next peak?
A: Based on historical cycle lengths, a peak in Q3 or early Q4 2025 is plausible—if bullish momentum returns and macro conditions stabilize.
Q: Is now a good time to buy Bitcoin?
A: For long-term investors, periods of consolidation after ATH breaks have historically offered favorable entry points—especially when smart money begins accumulating again.
Final Outlook
The current Bitcoin cycle may feel uneven compared to past rallies, but it remains structurally intact. Key on-chain indicators—including the MVRV-Z Score, VDD Multiple, and Capital Flows—point to rational market behavior: speculative excess at the top, followed by distribution and eventual reaccumulation by informed investors.
While macro risks persist, particularly around equity market performance and global economic health, Bitcoin’s underlying adoption trends continue to strengthen. Institutional interest, regulatory clarity in some regions, and technological advancements support long-term bullishness.
If history is any guide, we may be in the final stages of consolidation before entering the steepest part of the bull run. For patient investors, this phase offers one of the last opportunities to position ahead of a potential parabolic move.
Stay informed. Watch the data. And remember: cycles repeat—but those who understand them tend to profit most.