On May 22, 2025, Bitcoin's price surged past 110,000 USDT, refreshing the historical high of 109,599 USDT 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's high, marking the beginning of a long and profound bear market cycle. Now the market seems to be pushed to a turning point of fate once again: will it break through again, opening up a new round of upward space, or will it replicate history, falling into a double top scenario after a 'false breakout', ultimately leading to a significant correction?
This is a question that Bitcoin cannot avoid whenever it 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 arrived' arise one after another. This time, although the rise and pace seem vaguely familiar, the deeper market structure has undergone significant changes.
Prices are replaying, but the market is no longer what it was yesterday. 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 funding, on-chain structure, and overall economic narratives?
Returning to the most fundamental observational method, perhaps on-chain data, historical mirrors, and behavioral traces can still provide us with some cyclical insights. Is the current wave of price increase the final sprint of cyclical inertia, or a new starting point after reconstructing the cyclical structure? Perhaps the answer lies within the context of the data.
Is the market repeating historical paths?
The historical price trend 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 continuously evolved under the logic of 'halving-driven—supply-demand imbalance—bull market explosion—top adjustment', with each cycle ending at higher price peaks, and the double top structure of 2021 is undoubtedly the most cautionary tale.
Bitcoin first reached a phase high in April 2021, stimulated by favorable factors such as the listing of Coinbase, the continuation of loose monetary policies, and Grayscale's continued accumulation, leading to a surge in market sentiment and the price breaking through the $60,000 mark for the first time. However, this high did not last long. By May, with the Federal Reserve signaling tapering and interest rate hikes, coupled with 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 adjustment.
Months later, the market gradually digested negative sentiment and rebounded towards the end of summer. With El Salvador officially adopting Bitcoin as legal tender, global inflation fears rising, leading some investors to view it as a potential hedging tool, and the strong optimism surrounding the approval of the first Bitcoin futures ETF in the United States, positive narratives and capital inflows regrouped the upward trend, briefly surging above the historical high of about 69,000 USD on November 10, before quickly falling back, forming a clear, multi-month 'double top structure' alongside the April peak.
Ultimately, this triple resonance of price hitting new highs, active on-chain cashing out, and shrinking demand constitutes a typical 'false breakout' pattern. After briefly breaking the peak, Bitcoin quickly fell back, marking the beginning of a downward cycle. This structure technically presents as 'local new high + volume divergence + instant reversal,' which is a typical double top signal and provides an important lesson for the current market phase close to 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 releasing signals of structural convergence.
The latest 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 capital in the market has re-entered the profit zone. From a behavioral finance perspective, this structural change is a necessary condition for forming top pressure: when the vast majority of investors return to a profit state, the desire to cash out often increases simultaneously.
However, if we analyze from the perspective of 'selling pressure behavior' in on-chain structure, although the short-term investors' selling risk ratio shows a significant increase, indicating that some on-chain profit release actions have occurred, the overall value remains at a historically low-medium level. This state reflects that although investor sentiment has warmed, and some funds choose to take profits within the profit range, the overall market has not yet entered an imbalanced state dominated by 'collective cash-out momentum.'
This means that while the upward space is initially suppressed, the market has not lost control. As long as subsequent liquidity remains stable, the market still has the conditions to continue its 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 judging Bitcoin's cycle. Whether in 2013, 2017, or 2021, every major bull market's endpoint has almost always been accompanied by a 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 started to re-establish their positions, this may indicate that the market is still in the top area or still constructing a high double top structure.
What will the future trend be?
According to on-chain analyst @Murphychen's calculation method, using Bitcoin's MVRV for evaluation, since MVRV essentially represents the relationship between funds and costs.
Bitcoin has consistently followed the principle of MVRV and spot price divergence over the past decade, meaning that once a higher price appears but with a lower MVRV divergence, subsequent indicators cannot break through the previous highs, and the price space gets suppressed.
The logic behind this is that as the cost of turnover increases, pushing prices higher requires an exponential increase in capital.
The highest point of MVRV in this cycle occurred on March 11, 2024, with Bitcoin priced at $72,000 and MVRV at 2.78; after that, whether on December 17 or January 21, although Bitcoin's price reached new highs, MVRV never broke through 2.78.
Therefore, for Bitcoin to head towards the stars and the sea, the first and most important step is to break the large-scale MVRV divergence. Based on the current RP dynamic value calculation, Bitcoin's price needs to break through $125,500.
This article is authorized to be reproduced from: (ForesightNews)
Author: ChandlerZ, Foresight News
'Bitcoin breaks through 110,000! Once again reaching a historical high, is it a real breakout or a false breakout?' This article was first published in 'Crypto City'
