Key Takeaways
Bitcoin’s price action now mirrors the 2021 cycle top, further raising concerns after it broke below its 2025 trendline support. But a rebound was likely, according to analysts.
Bitcoin [BTC] has extended last week’s pullback to 7%, cracking a key 2025 trendline support and sparking renewed calls for a market cycle top across Crypto Twitter (CT).
As of press time, the asset traded around $115K ahead of key macro events with close resemblance to the 2021 cycle top.
But market positioning and macro landscape suggested some players expected a rebound.
Source: BTC/USDT, TradingView
BTC mirrors 2021 cycle top, but…
Swissblock analysts pointed out that while the current price action mirrored the 2021 cycle top, the macro regime was totally different.
The 2021 cycle top coincided with quantitative tightening (QT) that drained liquidity from markets.
For 2025, however, Swissblock highlighted that the macro landscape would tilt towards ‘quantitative easing (QE)’ and Fed rate cuts that could fuel risk assets in the mid-term.
“In 2025, we’re approaching QE and rate cuts. Technical fragility vs macro tailwinds. Short-term fragility, but macro liquidity tilts the balance.”
Source: Swissblock
Bitcoin trader Bynzantine General and macro analyst Alex Kruger echoed a similar outlook.
In fact, the Byzantine General projected ‘no larger correction’ and a potential firm bottom near the range low of $110K.
“BTC lost the EQ, and no big volume coming in yet. I’m not really worried about a larger correction.”
On-chain data also supported the positive view. According to BTC peak indicators aggregated by CoinGlass, none have flashed overheated signals as of press time.
Put differently, there could be more room for growth for BTC despite being at the late market stage per the normal 4-year cycle.
Additionally, the short-term holder SOPR (profitability) dropped below 1, marking the ‘buy the dip’ zone. The indicator has marked past local bottoms and peaks in 2024 and 2025.
CryptoQuant
In other words, any further pullback could be a discounted grab if BTC shoots up again.
What’s next for BTC?
Interestingly, the Options data also painted a similar rebound scenario. The 25 Delta Skew dropped for a 1-day tenor (green) but steadily surged for a 1-month tenor (blue).
This meant that there was bearish sentiment (premium for puts) in the short-term. But the mid-term appeared positive (premium for calls shown by rising 1-month tenor).
Source: Laevitas
The hedging and bearish sentiment in the short-term was warranted ahead of the July FOMC Minutes on Wednesday.
Besides, Fed chair Jerome Powell’s speech during the Jackson Hole symposium on Friday will further affect September rate cuts and BTC price action.
Whether BTC will hold above $110K remains to be seen ahead of this week’s macro events.
