Is the Crypto Bull Market Over?

The crypto bull market, which began in early 2024, has demonstrated resilience and rapid growth. However, recent price corrections and macroeconomic concerns have sparked debate about whether this cycle is nearing its end. 

Today, let’s look at both sides of the debate and understand the state of the market.

Arguments Suggesting the Bull Market is Over

On-Chain Indicators Flash Red

Two crucial on-chain indicators—Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL) and the Block Subsidy Model—highlight patterns consistent with previous market peaks.

The LTH-NUPL, which measures the profitability of long-term holders, crossed above 0.75 in December 2024, a threshold historically associated with cycle tops. Previously, in 2017 and 2021, the NUPL had reached similar levels and the price dropped shortly thereafter.

The second indicator we will be looking at is the Block Subsidy Model, which evaluates Bitcoin’s price relative to the cost of production.

Bitcoin's price reached the 32x Thermocap line—below the 62x line seen in the 2013 bull market and the 2017 peak. This diminishing return pattern signals that Bitcoin's potential for explosive growth is constrained and that the top of this cycle might already be near or passed.

Macroeconomic and Monetary Conditions

The US Federal Reserve has hinted multiple times that they are reducing the pace of interest rate cuts in 2025. Historically, periods of rate cuts have proven beneficial for crypto markets. For instance, when rates were near zero between 2020 and 2022, before rate hikes resumed, BTC surged by 375%.

Secondly, the US dollar has gotten increasingly strong in the past few months.

A strong US dollar means that investors would rather keep their assets in USD instead of putting their capital in high-risk assets like crypto.

Arguments Supporting the Continuation of the Bull Market

Favorable Regulatory Climate

It is very important to remember that the current regulatory climate surrounding crypto is the most bullish it has ever been. Under the Trump administration, the US will adopt pro-crypto policies, including regulatory clarity and the establishment of a strategic Bitcoin reserve

Trump has also proposed a "Made in the USA" initiative for Bitcoin mining, aiming to boost the American mining industry. By encouraging domestic production and aligning energy policy to support mining, Trump hopes to position the United States as a global leader in Bitcoin production. 

The previous SEC chair Gary Gensler has also resigned from his position. HIs replacement, Paul Atkins, is already set to lead the SEC. Atkins, an advocate for clear and fair crypto regulations, has long criticized the lack of standards in the industry and supports integrating digital assets into mainstream finance.

Trump has also appointed David Sacks as the Crypto Czar and US policy lead on AI and cryptocurrency. Sacks, a tech-focused investor and member of the "PayPal Mafia," brings a business-friendly perspective and has invested in crypto startups like BitGo and Multicoin Capital. His leadership is expected to encourage innovation while addressing overregulation concerns.

Along with the US, countries like Germany, Hong Kong, Russia, Brazil, and Poland are all considering using BTC as a strategic reserve asset.

Growing Institutional Adoption

The approval of spot Bitcoin and Ethereum ETFs have opened the market to a broader investor base. ETFs lower the barrier to entry for traditional investors, driving liquidity and enhancing market stability. Institutional players like BlackRock, Fidelity, and Franklin Templeton have introduced these ETFs and have already seen record amounts of inflows. 

Once Trump takes office and implements friendlier regulatory measures, it will pave the way for institutions to adopt crypto assets.

Resilient On-Chain Indicators

While some on-chain metrics signal caution, others suggest the market still has room to grow: The HODL Wave, which measures the age of Bitcoin transactions, shows that short-term holders account for just over 50% of activity—below the 70% threshold observed during previous cycle tops. 

This indicates that while speculative behavior is increasing, the market has not yet reached an overheated state.

Our Conclusion: The Bull Market is Not Over

At the end of the day, macro is king.

The equation is simple. Donald Trump has still not taken office, but he has already taken several “pre-measures.” As per the Washington Post, Donald Trump’s transition team is working closely with crypto leaders to finalize a legislative strategy, prioritizing revised crypto policies. On his first day, Trump is expected to issue executive orders addressing issues like de-banking and repealing a controversial crypto accounting policy that classifies digital assets as bank liabilities.

As such, it is very premature to dismiss the bull market before the most crypto-friendly president and administration even has the chance to properly take office.

For long-term investors, this period represents an opportunity to accumulate assets at a discount before the market’s next upward leg. 

By maintaining a disciplined approach and focusing on fundamentals, users can position themselves to benefit from the continued growth of the cryptocurrency ecosystem.

This is why it is important that you join the Coiners if you haven’t already. The Coiners group is full of traders with different experience levels, guided by our highly experienced mentors. Instead of falling victim to FOMO and hawkish narratives, it is important to take a strictly analytical approach. This is where our Circle experts and senior traders can be extremely helpful.

Do not wait and join us ASAP.