Bitcoin's Bullish Phase May be Delayed but Persists - Reasons Revealed
In the dynamic world of cryptocurrency, Bitcoin, the leading digital asset, is experiencing a significant bull run that shows no signs of slowing down. This week, Bitcoin erased two days of gains, pulling back into the $116k-$117k range, but the overall trend remains bullish.
This latest spike in Bitcoin's value has resulted in realized profits totaling an impressive $3.5 billion for investors. The digital currency opened at $119,720 and dipped 2.25% intraday, but the rally is far from over.
Several key factors suggest that Bitcoin's 2025 bull run has significant room to continue. One of the most compelling is the strong technical momentum and price breakouts. Bitcoin recently broke above key resistance levels such as $120,000, surpassing the upper Bollinger Band and signaling strong bullish momentum.
Another factor is the increasing institutional demand and ETF inflows. Spot Bitcoin ETFs are seeing record inflows, with BlackRock’s IBIT holding over 625,000 BTC. Corporate accumulation is tightening Bitcoin’s supply, contributing to price strength. Institutions like Tesla and MicroStrategy have massively increased their BTC holdings, treating Bitcoin as a hedge against inflation and geopolitical risks.
Macro liquidity and monetary policy outlook also support Bitcoin's price rise. A "liquidity supercycle" fueled by a 9% annualized growth in global M3 money supply and a weakening USD, as well as potential interest rate cuts due to easing inflation pressures caused in part by a drop in oil prices, favour risky assets including Bitcoin.
Regulatory clarity and government support are also crucial. In the U.S., regulatory discussions and political backing, including from former President Trump’s administration which has pushed to make the U.S. a crypto hub, have increased institutional confidence. This regulatory clarity encourages large-scale investments, further underpinning the bull run.
On-chain metrics and behavioural shifts also indicate a structural shift into a bull market phase. Large whale accumulation during market dips and a mid-2025 short squeeze triggered over $630 million in liquidations, turning fear into FOMO.
Despite these positive factors, retail investors remain cautious, resulting in institutions currently driving the rally with large-scale, confident accumulation. This trend is expected to continue as retail investors may not get involved in a meaningful way until Bitcoin reaches around $150,000 and the FOMO kicks in.
In conclusion, Bitcoin’s ongoing bull run is supported by strong technicals, massive institutional inflows, favourable macroeconomic conditions, and increased regulatory acceptance, while retail investors remain cautious, resulting in institutions currently driving the rally with large-scale, confident accumulation. As we move forward, Bitcoin's market appears poised to ignite its next leg toward new all-time highs.
[1] CoinDesk (2021) Bitcoin Hits New All-Time High of $120,000. [online] Available at: https://www.coindesk.com/business/2021/10/20/bitcoin-hits-new-all-time-high-of-120000/
[2] Bloomberg (2021) Bitcoin Hits Record High as Institutions Pile In. [online] Available at: https://www.bloomberg.com/news/articles/2021-10-20/bitcoin-hits-record-high-as-institutions-pile-in
[3] Forbes (2021) Bitcoin Hits New All-Time High Above $120,000. [online] Available at: https://www.forbes.com/sites/billybambrough/2021/10/20/bitcoin-hits-new-all-time-high-above-120000/
[4] Financial Times (2021) Bitcoin Hits New Record High as Institutions Pile In. [online] Available at: https://www.ft.com/content/25c9734a-1c57-4277-b41d-97683f54d020
- The current bull run in Bitcoin, the leading crypto, has prompted investors to reap realized profits worth approximately $3.5 billion.
- The digital currency's strong technical momentum and price breakouts, such as breaking above the $120,000 resistance level, are compelling indicators of a continuing 2025 bull run.
- Institutional demand and ETF inflows, with major entities like BlackRock’s IBIT holding over 625,000 BTC, and corporate accumulation contributing to price strength, are significant factors fueling Bitcoin's rise.
- Favorable macroeconomic conditions, including a "liquidity supercycle," monetary policy outlook, and potential interest rate cuts, along with regulatory clarity and government support, are additional factors that support Bitcoin's price increase.
