The crypto bull market, which began in early 2024, has been marked by rapid growth and resilience. However, recent price corrections and macroeconomic developments have raised questions about whether the bull cycle is nearing its end.

Let’s explore both the bearish and bullish perspectives to better understand where the market stands today.

Bearish Arguments: Why Some Say the Bull Market May Be Over

On-Chain Indicators Suggest Market Caution

Two key on-chain indicators are raising alarms:

1. Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL):
   • This metric, which measures the profitability of long-term Bitcoin holders, crossed the critical 0.75 threshold in December 2024.
   • Historically, such levels have coincided with market tops, as seen in the bull runs of 2017 and 2021. In both cases, Bitcoin’s price declined sharply after hitting similar levels.

1. The Block Subsidy Model:
   • This model compares Bitcoin’s price to its cost of production.
   • Bitcoin’s price recently touched the 32x Thermocap line, signaling diminishing returns compared to prior cycles (62x in 2013 and 2017). This trend suggests limited potential for explosive growth in the current cycle.

Macroeconomic and Monetary Conditions

The U.S. Federal Reserve has signaled a slower pace of interest rate cuts in 2025, contrasting with past periods of near-zero rates that fueled Bitcoin’s rise (e.g., 2020-2022, when Bitcoin surged by 375%).

Additionally, the U.S. Dollar (USD) has strengthened in recent months, making risk assets like cryptocurrencies less attractive. A strong USD often prompts investors to allocate capital toward safer, fiat-based assets instead of high-risk markets like crypto.

Bullish Arguments: Why the Bull Market May Continue

A Favorable Regulatory Environment

The regulatory outlook for crypto has never been more optimistic:

• U.S. Pro-Crypto Policies Under Trump Administration:
  • President-elect Donald Trump has outlined plans for a pro-crypto agenda, including regulatory clarity and the creation of a U.S. Bitcoin reserve.
  • Proposed policies include a “Made in the USA” Bitcoin mining initiative, which aims to strengthen America’s crypto mining infrastructure.
• Key Appointments:
  • Trump has appointed Paul Atkins as the new SEC chair, a vocal advocate for clear and fair crypto regulations.
  • David Sacks, an influential tech investor, will serve as the U.S. “Crypto Czar” and policy lead for AI and cryptocurrency. His involvement is expected to encourage innovation and reduce regulatory barriers.

Outside the U.S., countries like Germany, Brazil, and Hong Kong are reportedly considering adopting Bitcoin as a strategic reserve asset, signaling growing global acceptance.

Institutional Adoption at Record Levels

The approval of spot Bitcoin and Ethereum ETFs has opened the crypto market to a wider audience, driving liquidity and stability. Institutional giants like BlackRock and Fidelity have launched crypto ETFs, seeing record inflows from traditional investors.

These developments lower the barriers to entry for traditional investors, creating an environment ripe for further adoption once pro-crypto policies are implemented.

Resilient On-Chain Metrics

While some metrics signal caution, others remain bullish:

• The HODL Wave indicates that short-term holders account for just over 50% of activity. This is below the 70% threshold observed at previous cycle peaks, suggesting the market has not yet reached a state of extreme speculation.

Conclusion: The Bull Market Is Likely Not Over

Despite recent corrections, the crypto bull market still appears to have room to grow. Several factors support this outlook:

1. Regulatory Tailwinds:
   • Trump’s pro-crypto administration, combined with global adoption trends, provides a supportive framework for future growth.
2. Institutional Momentum:
   • The increasing adoption of crypto ETFs and institutional investment bolsters market stability and liquidity.
3. Macro Timing:

• • • While the Fed’s current policy creates short-term headwinds, inflation concerns and the eventual need to cut rates could provide renewed fuel for Bitcoin’s next rally.

For long-term investors, this may represent an opportunity to accumulate assets before the market’s next upward phase. Maintaining a disciplined approach and focusing on market fundamentals will be key to navigating the current volatility.

The question is not whether the bull market will end but rather when it will resume its upward trajectory.