The current trends in the cryptocurrency market captivate countless investors. As Bitcoin breaks through the historical high of $97,000 in May 2025, market sentiment becomes extremely polarized: some believe this is the 'last carnival' of the bull market, while others firmly believe in the 'perpetual bull market.'
This article will comprehensively analyze the current market stage and potential future direction from the perspectives of historical cycles, market signals, institutional movements, and technical indicators.
1. Historical cycle perspective: The patterns and variables of bull-bear alternation.
According to the Bitcoin halving cycle pattern, halving events (block rewards halving) are usually seen as catalysts for the start of a bull market. Historically, the 12-18 months following a halving have been peak periods for bull markets, such as the peaks in 2017 (18 months after halving) and 2021 (14 months after halving) conforming to this pattern. After the fourth halving in May 2024, 2025 is highly likely to be at the climax stage of the bull market cycle.
However, this cycle has its peculiarities: the early entry of institutional funds (such as BlackRock Bitcoin ETF's net inflow of $1 billion in a single day) and the easing of macroeconomic policies (such as expectations of interest rate cuts by the Federal Reserve) may shorten the traditional bull-bear cycle. Analysts predict that this bull market may peak in May 2025 (target price of $100,000 - $156,000), followed by a 30%-50% correction in the summer, with a possible rebound again by year-end.
2. Current market signals: Three major supports for the continuation of the early bull market.
1. Continuous influx of institutional funds.
In April 2025, the weekly net inflow of Bitcoin spot ETFs reached $3.1 billion, setting a historical record. BlackRock's IBIT fund even surpassed its gold ETF, demonstrating traditional capital's recognition of crypto assets. Meanwhile, local governments such as Arizona plan to include Bitcoin as part of their reserve assets, further reinforcing its positioning as 'digital gold'.
2. Enhanced technical independence.
Bitcoin's correlation with the S&P 500 has fallen to 29%, indicating its safe-haven attributes are gradually strengthening. Currently, Bitcoin's price has broken through the key resistance level of $95,000. If it stabilizes in that range, it could trigger market FOMO sentiment, pushing the price to challenge the psychological barrier of $100,000.
3. On-chain data and sentiment indicators.
Large holder accumulation: The number of wallet addresses holding more than 1 BTC increased by 1.5% week-on-week to 1.02 million, indicating long-term investor confidence.
- Divergence in the derivatives market: Retail leverage is becoming cautious, but institutions continue to increase holdings through futures premiums (rising to 6.5%).
Market sentiment index: The current Fear and Greed Index is in the 'neutral to greedy' zone, not yet reaching extreme euphoria levels.
3. Potential risks: Warning signals for the start of a bear market.
Although the overall market sentiment is optimistic, the following risks may trigger a trend reversal:
1. High leverage: The current market leverage is close to the peak of the 2021 bull market. If a black swan event (such as regulatory negative news or exchange risks) triggers a chain liquidation, the correction may exceed expectations.
2. Policy uncertainty: The tightening scrutiny of DeFi and ICO projects by U.S. regulatory agencies may dampen market speculation enthusiasm.
3. **Technical pressure**: If Bitcoin cannot break through the resistance zone of $98,700 - $99,500, it may pull back to the support level of $86,000 - $92,000, forming a weekly level adjustment.
4. Conclusion: Currently in the mid-term of a bull market, be cautious of summer corrections.
Overall, the market in May 2025 is closer to the mid-term of a bull market rather than the starting point of a bear market. Institutional funds support, the halving cycle effect, and macroeconomic safe-haven demand still provide momentum for the bull market.
But be wary of the following key points:
Key resistance testing in May: A breakout above $100,000 may accelerate the price surge; conversely, a failure would trigger a short-term correction.
Summer adjustment risk: Historical patterns show that a 30%-50% pullback may occur from June to August, similar to the 'summer low' of 2021.
Year-end rebound potential: If global liquidity continues to ease (such as interest rate cuts by the Federal Reserve), new highs may be reached again by year-end.
Investor strategy recommendations:
- Short-term focus on key technical price levels (such as $95,000, $100,000) and avoid high-leverage chasing.
- In the medium to long term, consider accumulating BTC, ETH, and other leading assets during corrections, while also paying attention to emerging tracks like AI and RWA (Real World Asset tokenization).
- Prioritize compliant trading platforms (such as the XBIT decentralized exchange) to avoid centralized risks.