The coming week could be short but extremely eventful for the crypto-assets markets. A combination of macroeconomic data, institutional investments and dynamic movements in altcoin segments signals a phase that offers both opportunities and risks. Bitcoin remains the focus as the market moves towards crucial price levels, while altcoins may be undergoing a rotation that could establish new patterns in the overall market. The path to sustainable prices above the $100,000 mark and beyond remains a key issue.
Institutional Buying – The Role of Companies like MicroStrategy
institutional investors, particularly companies like MicroStrategy, are playing an increasingly significant role in the formation of the Bitcoin price. In recent weeks, they have heavily influenced the supply side of the market through massive purchases in the billions. For example, it was reported last week alone that companies like Marathon Digital purchased 5,700 Bitcoin, while MicroStrategy also made purchases worth billions of dollars.
These purchases are positive for price stability in the long term, as they reduce the available supply of Bitcoin. However, the latest data also show a strong counter-trend: profit-taking on the part of long-term investors. These sales could dampen short-term upward pressure. Should institutional buying activity slow, it could create an imbalance in the market that could lead to a temporary decline in prices.
Bitcoin Exchange Reserve All Exchanges (Source: cryptoquant.com)
Another aspect is the concentration of large Bitcoin holdings in the hands of a few companies. Should the Bitcoin price rise sharply, this concentration will become a structural risk for the market in the long term.
On-chain Data – Indicators of Market Health
On-chain metrics provide valuable insights into the health and dynamics of the crypto market. Particularly relevant here are indicators such as the “Net Unrealized Profit/Loss” (NUPL), which currently indicates that the market is slowly moving into a euphoric phase. At 3.21, the MVRV-Z score, another important indicator, is currently still below the range of previous peaks. In previous bull cycles, this value was a reliable harbinger of parabolic price movements.
Bitcoin MVRV Z-Score (Source: bitbo.io)
An interesting statistic concerns long-term Bitcoin holders, who continue to hold significant amounts despite profit-taking. Historically, the phase in which long-term investors realize profits lasts between 8 and 11 months. From this, it could be deduced that the current cycle may possibly reach its peak in the period from June to September 2025.
Altcoin Rotation – Momentum beyond Bitcoin
A key theme for the coming months is altcoin rotation. Historically, Bitcoin dominance often falls in the late stages of a bull market. This development is not necessarily negative for Bitcoin, but rather shows that altcoins are rising to a greater extent. For example, If the Bitcoin market value increases from $2 trillion to $2.2 trillion, while the Altcoin market value increases from $2 trillion to $2.4 trillion, Bitcoin dominance would decrease even though both segments are growing.
Bitcoin Dominance Chart Year-to-Date (Source: Tradingview)
Smaller altcoins in particular have seen remarkable price increases in recent weeks. Altcoins that are not among the heavyweights such as Bitcoin or Ethereum are showing signs of greater momentum, indicating increased demand. So the beginning of an altcoin season could be imminent.
Bitcoin Price Forecasts – What is Realistic?
The price forecasts for Bitcoin in this cycle are manifold. A conservative estimate, based on the growth rates of previous cycles, is a price of between $108,000 and $155,000 by the end of the year. Other scenarios, assuming a repetition of previous parabolic patterns, could see prices of up to $262,000 or even more.
However, historical data shows that growth rates decrease in each new cycle. While the first major cycle in 2013 saw a growth of 452x, in 2017 it was “only” 112x and in 2021 around 20x. The current cycle is so far hovering around a factor of about 6, which limits realistic expectations to a 10x factor.
An extreme scenario with prices of over USD 1 million seems unlikely, however, as it would require a massive capital injection, such as that recently favored by expansionary monetary policy in 2020–2021. In the current monetary policy landscape, such growth is rather unrealistic.
Macroeconomic Conditions and the Role of ETFs
The introduction of Bitcoin spot ETFs has significantly shaped the market this year. These funds have so far accumulated more than 1 million Bitcoin and could become even more important in the coming months. At the same time, the macroeconomic situation remains crucial. Data such as the US gross domestic product and PCE core price index, which will be released this week, provide indications of the future interest rate policy of the Federal Reserve. This interest rate policy directly influences the demand for risky assets such as crypto assets.
The upcoming holiday week in the U.S., when exchanges are open for a shorter period, could further affect trading volume and volatility.
Long-term Challenges and Opportunities
While the short-term momentum is promising, long-term challenges remain. The increasing concentration of Bitcoin in the hands of a few institutional players could become a problem. At the same time, profit-taking in corporate stocks, as recently seen in technology giants like Nvidia, could indicate larger corrections.
Nevertheless, the long-term outlook for crypto assets remains positive. The opening of the market to institutional investors and the continuous development of infrastructure such as spot ETFs provide a solid foundation for further growth. However, a realistic and balanced approach will be crucial to make the most of the opportunities and minimize the risks.
Relevant article: https://blockzeit.com/is-a-correction-coming-why-the-crypto-market-could-be-taking-a-breather/
Author
Ed Prinz serves as Chairman of https://dltaustria.com, the most renowned non-profit organization in Austria specializing in blockchain technology. DLT Austria is actively involved in the education and promotion of the added value and application possibilities of distributed ledger technology. This is done through educational events, meetups, workshops and open discussions, all in voluntary collaboration with leading industry players.
Disclaimer
This is my personal opinion and not financial advice.
For this reason, I cannot guarantee the accuracy of the information in this article. If you are unsure, you should consult a qualified advisor you trust. No guarantees or promises regarding profits are made in this article. All statements in this and other articles are my personal opinion.