Bitcoin’s steep corrections may be ‘relic of past’, analysts say

With institutional involvement and shifting market dynamics, analysts believe Bitcoin’s bull market could outlast past cycles, extending past 2025.

Bitcoin’s (BTC) future might break from its usual cycle, with analysts suggesting that past steep corrections could be a thing of the past. In an X post on Jan. 31, analysts at Singapore-based blockchain firm Matrixport suggested that with Wall Street stepping in, Bitcoin’s bull market could extend well beyond 2025.

The largest crypto by market capitalization typically follows a predictable pattern: three strong years, followed by a sharp correction of at least 70%. But this time could be different, the analysts say. The approval of spot Bitcoin exchange-traded fund in 2024 has brought in more institutional investors.

“These institutional investors not only hold Bitcoin for longer durations but are also buoyed by the confidence provided by more transparent regulations. Additionally, structural macroeconomic tailwinds suggest that substantial capital allocation into Bitcoin could continue for years.”

Matrixport

While Bitcoin usually reacts to liquidity changes with a 13-week delay, current trends suggest a correction might be on the way, the analysts warn. However, they point out that Bitcoin is resisting those typical patterns as it “might decouple from global liquidity dynamics and maintain current levels.”

According to Matrixport, Bitcoin’s price has historically followed a “power-law log chart.” In that chart, the lower boundary represents the cycle’s bottoming prices. In contrast, a breakout through the power-law line “signals the onset of a new bull market,” the add.

Based on that framework, the current cycle suggests “potential upside targets of $157,000 or even as high as $315,000,” the analysts suggest, though the timing remains unclear as “this time, the dynamics may indeed be different.”