On-chain Analysis Week 1 / 2025 : Everything is ready, Bitcoin will reach new ATH in 2025 ?

After a year of extreme volatility and Bitcoin’s meteoric rise to an ATH of $107k, altcoins are still well below where Bitcoin is growing. The old adage in the market is “buy low, sell high.” However, many newcomers to the Bitcoin market do the opposite, suffering heavy losses at the top of the market, only to give up at the bottom.

1/6/20256 min read

Summary

Institutional investors' Bitcoin holdings have increased from 14% in 2023 to nearly one-third of the total global Bitcoin holdings by the end of 2024. Many experts predict that Bitcoin prices will continue to rise in 2025 and will reach ATH at the price range of 180 thousand USD.

In the current context, the total supply of long-term investors is showing a deep downward trend, which proves that we have gone through the distribution phase of LTHs, ready for a new trend in the near future.

Similar to the weather, markets tend to go through cycles, and this is especially true for Bitcoin. A defining characteristic of Bitcoin market cycles is that they often reach extremes, often marked by irrational exuberance at the peak and deep despair at the trough.

With the wealth of on-chain data we have, we can analyze these periods and identify when investor behavior aligns with market extremes.

Analysis of prominent on-chain metrics

During the periods when Bitcoin reaches ATH, we will see a distribution and bottoming of the Total Supply of Bitcoin held by Long-Term Holders (LTH).

This could indicate that long-term investors are locking in their profits and preparing for a new cycle of Bitcoin, by the end of 2024 we see a similar distribution, however we need more certainty on this indicator, let's look at:

  • 2013 : down 11.9% (Bitcoin ATH $229)

  • 2014 : down 12.8% (Bitcoin ATH $1,133)

  • 2018 : down 24.5% (Bitcoin ATH $19,179)

  • 2021 : down 18.8% (Bitcoin ATH $64,800)

  • 2024 : 9% decrease (Bitcoin ATH $107,000)

All time highs are periods where LTHs are holding large amounts of Bitcoin before BTC reaches ATH, in which:

  • 2011 : Limited data, but estimated supply held by LTH was around 50-60% of total supply.

  • 2015 : This percentage increased to around 70%, as many investors decided to hold Bitcoin through market fluctuations.

  • 2018 : After the 2017 bull run, the supply held by LTH peaked at around 80%, indicating that many people believe in Bitcoin's long-term potential.

  • 2021 : Despite the increase in the number of new investors, the supply ratio held by LTH remains at 75-80%.

  • 2023 : This ratio continues to stabilize at 78%, reflecting the steadfastness of long-term investors.

However, the distribution trend is still continuing, in previous Bitcoin cycles, this trend always decreased by more than 11% and then was the ATH of Bitcoin in the growth cycle, according to the inference of some experts, Bitcoin will reach a new ATH of 180 thousand USD in 2025, this is similar when this index drops below 12.8 million BTC.

Bitcoin typically declines ~60% to ~90% after each bull cycle, reflecting the high volatility and speculative nature of the market. Here is a breakdown of each major phase:

  • 2011-2013 cycle: down ~94%, caused by the nascent market boom and low awareness of Bitcoin; low liquidity and large impact from minor negative events.

  • 2013-2017 cycle : down ~85%, caused by the Mt.Gox incident which caused loss of market confidence and slow development of the ecosystem around Bitcoin.

  • 2017-2020 cycle: down ~84%, caused by FOMO psychology leading to bubbles and regulations from governments, especially from the SEC.

  • 2021-2023 cycle: down ~77%, due to rising global interest rates and tightening monetary policies of banks, however the collapse of Terra and FTX is the cause of the greatest pressure on investors' sell-off sentiment.

  • 2024-2025 cycle: forecast to drop ~30% due to profit-taking sentiment as Bitcoin trades above $100k for the first time in history.

In 2025 : If Bitcoin hits a new high, a large drop (~-60% or more) could occur, reflecting the normal correction cycle. Potential causes could be FOMO, selling pressure from short-term investors, and government regulations on crypto assets.

Bitcoin Supply in Profit/Loss measures the percentage of the total Bitcoin supply that is in profit or loss, based on the current price compared to the price at which each Bitcoin was last traded. This metric provides insight into market sentiment and investor behavior during different periods.

With the halving event expected in 2024 and growing adoption, many experts predict that Bitcoin prices could reach new highs in 2024 - 2025. This will increase the supply-to-profit ratio, boosting positive sentiment in the market.

A high ratio of supply in profits is often accompanied by bullish sentiment, while a high ratio in losses can indicate anxiety or panic.

Sudden changes in this ratio can signal potential market reversal points, helping investors adjust their strategies in time.

LTH Realized Price and LTH MVRV provide insights into long-term investor behavior and market trends, which:

  • 2011-2013 Cycle : LTH Realized Price hovered around $10 before MVRV hit ATH at ~30, reflecting Bitcoin's first ATH at $1,150

  • 2017-2018 Cycle: LTH Realized Price maintained ~$200 before MVRV dropped to ~8, reflecting Bitcoin reaching a new ATH at ~$20,000

  • 2021-2023 Cycle: LTH Realized Price maintains ~$7,000 before MVRV drops to 5, reflecting Bitcoin reaching ATH at ~$69,000

  • 2024-2025 Cycle: LTH Realized Price moves sideways in the ~$40,000 price range and MVTV drops to 4, reflecting Bitcoin reaching ATH at ~$107,000

There is a fairly recognizable MVRV downtrend pattern in Bitcoin's history, where the MVRV indicator hits a resistance line and then drops, and Bitcoin moves sideways during this period. It can be seen that at the end of 2024, the indicator hit the resistance level and continued to move sideways, Bitcoin is in the process of creating a strong uptrend coming.

The Number of Addresses with Balance >= 100,000 USD index reflects the distribution of assets in the Bitcoin network and the behavior of large investors (whales) as well as retail investors. This is an important indicator to assess the sentiment and strength of the market in the period of late 2024 to early 2025.

Adoption from large institutions and clearer regulations could see more addresses hit the $100,000 threshold. The launch of financial products like spot Bitcoin ETFs will drive inflows from institutional investors.

If Bitcoin hits new highs ($80,000 - $120,000), smaller addresses could naturally cross the $100,000 threshold.

If Bitcoin crosses $120,000, the number of addresses >= $100,000 USD could reach 700,000 addresses , with a strong increase from institutional investors.

A large number of addresses indicates optimism from investors, especially institutional investors. Growth in this indicator often accompanies bull cycles.

During the 2024 Halving and subsequent bull cycles, Young Supply is expected to increase by 40-50% due to the participation of new investors and more active trading.

On the contrary, Old Supply may decline slightly as some long-term investors realize profits. However, long-term accumulation confidence still plays an important role, helping Old Supply maintain above 50-60%.

A high Young Supply ratio indicates a hot market and short-term trading opportunities, but also potential for correction. A high Old Supply ratio reflects stability and long-term confidence.

Long-term investors should accumulate when Old Supply is high, which is often accompanied by low values. Conversely, short-term investors should take advantage of high Young Supply to trade quickly during the bullish phase.

Conclusion and evaluation

Based on long-term accumulation indicators and participation of large investors, Bitcoin is likely to reach the $150,000 - $180,000 USD mark by 2025. Factors such as 2024 Halving , large institutional adoption, and favorable macroeconomic environment will play an important role in pushing Bitcoin price higher.

As Bitcoin price continues to rise, the number of addresses with balances above $100,000 USD will increase sharply. This will reflect the increase in institutional investors and wealthy individuals entering the market. Young Supply may increase during the bull phase, but Old Supply still dominates, indicating long-term accumulation.

Bitcoin has a strong outlook for 2025, especially as prices could reach new highs. Factors such as institutional participation, stability of long-term investors, and important events such as the 2024 Halving will fuel the growth momentum.

However, the market may experience short-term fluctuations due to changes in the Young Supply ratio and volatility among short-term investors. In short, Bitcoin is likely to continue to grow and reach high prices in the long term, with some short-term corrections along the way.

Join the HCCVenture community to get the latest market information. Once again, we give our opinion on potential projects in the crypto market. This is not investment advice, consider your portfolio. Disclaimer: The views expressed in this article are solely those of the author and do not represent the platform in any way. This article is not intended to guide investment decisions.

Data from: data by HCCVenture

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