The year 2025 has commenced on a positive note with Bitcoin trading over $100,000. Should new records be expected this year?
Weakening Bitcoin-Equity Correlation
A notable shift in the correlation between cryptocurrencies and equities, especially Bitcoin and the S&P 500, has been observed. Since Donald Trump was elected as the 47th US President in November 2024, these markets have been closely linked. However, Santiment data suggests Bitcoin is gaining momentum, surging over 3% compared to a mere 0.4% rise in the S&P 500 in a single day. This divergence might indicate Bitcoin is decoupling from its perceived role as a 'high-leverage tech stock'.
Crypto Market in Later Stages of Bull Cycle?
This decoupling aligns with indicators that the cryptocurrency market is moving into the later stages of its current bull cycle, which began in January 2023. CryptoQuant data shows Bitcoin has experienced significant growth in both price and duration, bolstered by a substantial influx of investments. The percentage of Bitcoins traded for less than a month reached 36%. Though lower than past cycle peaks, the long-term trend remains downward, suggesting the cycle might close by mid-2025.
Forecasts for 2025
Analysts suggest Bitcoin could elevate to $140,000 in the coming months, marking a crucial milestone towards new highs. This might indicate the onset of a new growth phase in the cryptocurrency market.
In conclusion, the start of 2025 presents new potentials for Bitcoin and the broader cryptocurrency market. Whether it will be a record-breaking year remains to be seen, but current trends and indicators support this possibility.
