Market Response to Impact
21Shares, a cryptocurrency ETP issuer, stated that Bitcoin’s response to industry and macro impacts during this cycle demonstrates increasingly stable investor confidence, with the rising adoption rate in high-inflation countries reinforcing the narrative of Bitcoin as a hedge. Analysts believe that on-chain data and liquidity trends indicate the market is in a consolidation phase, and unless a significant shock disrupts the bullish outlook, Bitcoin is expected to reach $138,000 by the end of 2025.
Facing Market Impact
In a report released last week, 21Shares noted that the current market cycle is reminiscent of 2021 when China’s mining ban triggered a significant shake-up but did not alter the long-term bullish trend, as temporary disruptions were replaced by new accumulations. This time, the disillusionment with macro policies appears to play a similar role, with Bitcoin’s price movements indicating “resilience” rather than panic.
The report pointed out that, unlike in the past, Bitcoin’s response to external systemic macro shocks has become more robust. Events such as the collapse of Silicon Valley Bank no longer trigger panic selling across the market, and may even enhance Bitcoin’s prospects as a hedge against traditional financial risks. Additionally, there seems to be an increasing awareness of Bitcoin’s ability to hedge against uncertainty, as evidenced by the continued rise in adoption in high-inflation countries like Argentina and Turkey.
Notably, recent failures originating from the crypto space, such as the Bybit hacking incident, have not shaken investor confidence in Bitcoin itself. Unlike past cycles, the current market appears able to distinguish between the failures of centralized participants and the fundamentals of the industry. The report from 21Shares stated:
Bitcoin correction during bullish market (Source: 21Shares)
Bullish On-Chain Indicators
21Shares also noted in the report that on-chain indicators, including Bitcoin accumulation trends and long-term holder behavior, suggest that Bitcoin is in a consolidation phase rather than nearing a peak.
21Shares mentioned recent changes in the supply ratio between long-term holders (LTH) and short-term holders (STH). This indicator saw a significant reversal at the end of last year, dropping to its lowest point since 2021, while the recent rebound from the bottom indicates that short-term holders have recently been shaken out of the market, potentially paving the way for long-term holders to reassert dominance.
Analysts stated:
Source: 21Shares
The report also highlighted a strong correlation between Bitcoin and the global M2 money supply. Latest data shows that global liquidity has continued to rise over the past few weeks, which may lay the groundwork for short-term growth in Bitcoin demand. At the same time, the increasing inflow of spot ETF funds, ongoing improvements in regulatory clarity, and integration with traditional finance all provide momentum for a potential rebound.
However, the report also noted that the current macroeconomic situation remains unclear, including ongoing inflation, rising borrowing costs, and escalating geopolitical risks. The possibility of further declines cannot be ruled out, but the overall bullish market structure for Bitcoin has not been disrupted. 21Shares stated: Source
