Despite new all-time highs, the current upturn in the Bitcoin market remains unusually calm. Neither strong hype nor significant media attention is accompanying the development. Unlike in previous cycles, where sharp price rises were accompanied by public euphoria and a mass influx of small investors, the current cycle is more linear and calm.
This cautious development is also having an impact on the overall market: lower volatility means potentially lower short-term returns, but at the same time more stability. The absence of an exaggerated boom also suggests that any subsequent correction will be less drastic. There are signs that Bitcoin is increasingly becoming an asset that is growing in a more sustainable and less speculative manner.
Profit-taking and Risk Management: When to Sell?
A key issue among investors is when it makes sense to take profits. There is no universal answer, as financial situations, risk appetites, and goals vary from person to person. Some investors pursue a conservative strategy of regular partial sales, while others hold for the long term, especially with Bitcoin.
The decision to sell at certain price levels often depends on historical price developments and psychological thresholds. Personal liquidity also plays a role – those who already have sufficient cash reserves need to realize profits less frequently. Ultimately, it is a question of individual risk/return ratio.
Related article: Bitcoin on the verge of a monetary turning point – Why we are still early despite record prices
Bitcoin vs. Altcoins: Different Strategies, Different Risks
While Bitcoin is considered by many to be a stable long-term asset, altcoins are considered significantly more volatile and risky. Historical price performance shows that many altcoins have lost value again after a period of hype. Active profit-taking management is therefore particularly important for altcoins.
Bitcoin dominance chart (Image: Newhedge.io)
With Bitcoin, on the other hand, many are opting for a long-term holding strategy (“HODL”) because they are convinced that the price will continue to rise in the long term. To hedge their positions, some are also using futures trading to take short-term profits without liquidating their long-term spot positions.
About Hype and Disillusionment: Between Euphoria and Pessimism
The current market is showing an interesting psychological phenomenon: While Bitcoin is reaching new highs, there is widespread skepticism at the same time. Small price corrections are being met with exaggerated pessimism, even though they are completely normal from a historical perspective.
This suggests that the market is not yet in a final phase of euphoria. A sustained price increase over several months – as is currently the case – may even be healthier for the market than a sudden boom followed by a drastic correction.
The Altcoin Season: When Will the Alternatives Begin to Outperform Bitcoin?
A so-called “altcoin season” is defined by altcoins significantly outperforming Bitcoin in terms of value. This phenomenon can be measured by Bitcoin dominance – Bitcoin’s share of the total market capitalization of all cryptocurrencies.
If this dominance declines, it means that capital is flowing into other projects. Historically, such phases have usually occurred when Bitcoin had already risen sharply and excess capital flowed into more speculative investments. However, this phase has not yet been reached – Bitcoin’s dominance remains high, which suggests that capital behavior will remain cautious.
The Role of Money Supply: M2 as an Early Indicator of Market Phases
An often overlooked but relevant factor influencing crypto markets is the change in the money supply – specifically the M2 money supply indicator. When the money supply increases sharply on an annual basis, this usually means more liquidity in the financial system. In the past, this has often led to rising prices for Bitcoin and later also for altcoins.
Bitcoin vs. global M2 supply growth (Image: newhedge.io)
Rising money supply combined with expansionary monetary policy – such as bond purchases or interest rate cuts – could be a catalyst for a new phase of strong price gains. Currently, the expansion of the money supply is moderate, which is in line with the current rather subdued but stable market picture.
Global Debt and Strategic Government Bond Purchases
Another complex but important issue is growing government debt – particularly in the US – and the question of how it will be refinanced through bond purchases. When other countries such as the UK increase their purchases of US government bonds, this is not just a capital flow, but also a geopolitical and economic strategy.
Such purchases also serve as a liquidity reserve, a hedge against currency risks, and part of international trade relations. These mechanisms can also have an indirect impact on the money supply and risk appetite in the financial markets – including the crypto sector.
Related article: The 2025 global financial crisis and the role of Bitcoin
Stablecoins in Everyday Life: Between Vision and Reality
The idea of one day paying for groceries with stablecoins such as USDT or USDC is already a technical reality. Crypto credit cards can be used to make payments via stablecoins, which are automatically converted into fiat currencies in the background. However, practical hurdles remain, such as high fees, tax complexity, and regulatory uncertainties.
For these payment methods to gain widespread acceptance, progress is needed in particular in terms of regulation, user-friendliness, and tax clarity. However, it is foreseeable that these developments will accelerate in the coming years, especially in the US.
A Critical but Promising Market Phase
The current phase in the crypto market is neither euphoric nor panic-stricken. Rather, it is a mature and strategic market phase in which investors are acting in a more differentiated manner. It is a time of building, consolidation, and preparation for potentially larger movements—both upward and downward.
Whether an altcoin season is imminent, whether Bitcoin will rise parabolically, or whether regulatory and macroeconomic changes will influence the market—all of this depends on a multitude of complex factors. It is important to regularly review your own strategies, pay attention to data, and not be guided by short-term emotions. Because even when things are quiet, the best phase could be just around the corner.
Author
Ed Prinz serves as chairman of https://dltaustria.com, Austria’s most renowned non-profit organization specializing in blockchain technology. DLT Austria is actively involved in educating and promoting the value and applications of distributed ledger technology. It does this through educational events, meetups, workshops, and open discussion forums, 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 whom you trust. This article does not make any guarantees or promises regarding profits. All statements in this and other articles are my personal opinion.