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

Author: ChandlerZ, Foresight News

On May 22, 2025, the price of Bitcoin surged past 110,000 USDT, breaking the historical high of 109,599 USDT set on January 20. This scene inevitably reminds one of that moment in November 2021. At that time, Bitcoin quickly fell back after briefly surpassing the early-year high, marking the beginning of a long and profound bear market cycle. Now, the market seems to be at another turning point: will it break through again and open up a new round of upward space, or will history repeat itself, falling into a double top pattern after a "false breakout," ultimately leading to a significant correction?

This is a question that cannot be avoided whenever Bitcoin approaches historical highs. In past bull markets, we have repeatedly seen similar structures: the climax arrives, market sentiment soars, and discussions about whether "the cycle peak has been reached" abound. In this round, although the upward momentum and rhythm feel somewhat familiar, the deeper market structure has already undergone significant changes.

The price is replaying, but the market is no longer what it was. In this context, should we continue to believe that the "cyclical law" brought by halving still dominates Bitcoin's fate? Or should we acknowledge that a new rhythm has quietly unfolded in ETF funds, on-chain structures, and macro narratives?

Returning to the most essential observation methods, perhaps on-chain data, historical mirrors, and behavioral traces can still provide us with some cyclical insights. Is the current wave of increase merely the final sprint of cyclical inertia, or is it a new starting point after reconstructing the cyclical structure? Perhaps the answer lies within the data's context.

Is the market repeating historical paths?

The historical price movements of Bitcoin, although highly volatile, can roughly be divided into several typical cycles of "halving-driven + bull-bear rotation":

Since 2011, Bitcoin's price has consistently evolved under the logic of "halving-driven --- supply-demand imbalance --- bull market explosion --- peak correction," with each cycle ending at a higher price peak. The double top structure in 2021 is undoubtedly the most cautionary tale.

Bitcoin first reached a phase high in April 2021, stimulated by multiple favorable factors such as the Coinbase listing, the continuation of loose monetary policy, and Grayscale's ongoing accumulation of GBTC. Market sentiment soared, and the price broke through the $60,000 mark for the first time. However, this high did not last long. In May, as the Federal Reserve signaled tapering and interest rate hikes, combined with the policy risk of China's large-scale crackdown on domestic mining, the Bitcoin market quickly fell into a correction, dropping to around $30,000 in less than three months, completing a significant mid-cycle adjustment.

A few months later, the market gradually digested negative sentiment and rebounded towards the end of summer. With El Salvador officially adopting Bitcoin as legal tender, heightened global inflation concerns leading some investors to view it as a potential hedge, and strong optimistic expectations for the approval of the first Bitcoin futures ETF in the U.S., positive narratives and capital inflows reignited the upward momentum, briefly pushing the price to a historical high of around $69,000 on November 10, before quickly retreating, forming a clear, multi-month "double top structure" alongside the April high.

Ultimately, this triple resonance of new price highs, active on-chain realization, and shrinking demand constituted a typical "false breakout" pattern. After briefly surpassing the peak, Bitcoin quickly fell back, initiating a downward cycle. This structure technically manifests as "local new high + volume divergence + instant reversal," a classic double top signal, providing important lessons for the current market nearing historical highs.

Will history converge?

The current trend's slope and shape are quite similar to those just before November 2021. More importantly, multiple on-chain indicators are signaling structural convergence.

Recent data shows that the MVRV of long-term holders has risen to 3.3, approaching the "greed red zone" defined by Glassnode (above 3.5); the MVRV of short-term holders has also significantly increased from a low of 0.82 to 1.13, indicating that most short-term funds in the market have re-entered the profit zone. This structural change, from a behavioral finance perspective, is a necessary condition for forming top pressure: when the vast majority of investors return to a profit state, the desire to realize profits often increases simultaneously.

However, if we analyze from the perspective of "selling pressure" in the on-chain structure, the current short-term investors' selling risk ratio has shown a significant increase, indicating that some profits have been released on-chain, but the overall value remains at a historically moderate to low level. This state reflects that: although investor sentiment has warmed, and some funds choose to take profits in the profit zone, the overall market has not yet entered a state dominated by "collective realization momentum."

This means that while the upward space is initially constrained, the market is not out of control. As long as subsequent liquidity remains stable, the market still has the conditions to continue a structural upward trend, rather than being pushed to an ultimate peak.

Overall, the behavior of long-term holders has always been the most reliable slow-variable signal in Bitcoin cycle judgments. Whether in 2013, 2017, or 2021, the end of each major bull market has almost always been accompanied by concentrated distribution from these investors, while new bull market cycles often begin with their re-accumulation.

The current market has entered Bitcoin's fifth major cycle. If long-term holders have not yet begun a new round of position replenishment, this may indicate that the market is still in the peak area or is still constructing a high double top structure.

What does the future trend look like?

According to the calculation method of on-chain analyst @Murphychen, which uses BTC's MVRV for evaluation, because MVRV essentially represents the relationship between funds and costs.

For more than a decade, Bitcoin has consistently followed the principle of significant divergence between MVRV and spot prices, meaning that once a higher price appears but MVRV is lower, subsequent indicators cannot break through previous highs, and the price space is then constrained.

The logic behind this is that as the turnover cost increases, pushing the price higher requires exponential capital increments.

The highest point of MVRV in this round appeared on March 11, 2024, with BTC priced at $72,000 and MVRV at 2.78; since then, whether on December 17 or January 21, even if BTC prices reached new highs, MVRV has never surpassed 2.78.

Therefore, for BTC to reach for the stars, the first and most crucial step is to break the significant divergence of MVRV. Based on the current RP dynamic value, BTC's price needs to break through $125,500.