Bitcoin is having difficulty overcoming the resistance level at $85,000, marking a 30% drop from its peak of $109,287 reached in January.
This has led to increasing uncertainty in the market regarding the current phase of its cycle.
Analysts suggest that historical trends associated with Bitcoin halving events indicate a possible upward movement in late 2025 or early 2026, despite the recent downturn.
Historically, Bitcoin’s cycles have featured sharp surges followed by substantial declines, most notably an 80% drop after its 2017 peak and a 75% fall following the high in 2021.
Currently, on-chain indicators present a mix of signals. The MVRV Z-Score, which compares market value to realized value, suggests Bitcoin might be in a state of deep value or consolidation. Additionally, the percentage of Bitcoin that has remained untouched for more than a year is at 63%, reflecting cautious sentiment among investors and potential market stabilization.
The Fear & Greed Index also underscores the prevailing market uncertainty, recently plummeting to “Extreme Fear” at 15 after hitting “Extreme Greed” levels nearing 90 in December 2024.
Broader economic factors, including changes in institutional investments and developments in U.S. policy, are having a significant impact. The approval of Bitcoin ETFs in January 2024 initially propelled prices up by 126%, but by early 2025, unprecedented ETF outflows indicated diminished institutional backing.
In contrast, a recent executive order from President Trump establishing a U.S. Strategic Bitcoin Reserve illustrates continued federal engagement.
Although short-term fluctuations persist, there remains optimism about Bitcoin’s long-term prospects. Some leading financial institutions are forecasting prices approaching $200,000 by year-end, fueled by fresh institutional investments and clearer regulations.
For Bitcoin miners, the recent price decline, paired with heightened mining difficulty and lower block rewards, has drastically impacted profitability, underscoring the necessity for prudent risk management through derivative instruments like Hashprice contracts.