Bitcoin's Bull Run: Is the Slump Over?
22min read Bitcoin has surged to fresh heights in early 2025, sparking debates about whether its multiyear slump is finally ending. After bottoming at $74,000 in April 2025, Bitcoin (BTC) rebounded to $95,000 by mid-May—a 28% gain in a month—driven by a cocktail of technical momentum, institutional inflows, and on-chain indicators. But is this rally sustainable, or just another false dawn in crypto’s volatile history?
Ask Aime: "Can Bitcoin's recent rally sustain, or is it just a fleeting moment in a volatile market history?"
The Price Surge: What’s Driving Bitcoin’s Recovery?
The recent rally began on May 4, 2025, when Bitcoin surged from $58,200 to $62,800 in six hours—a 7.9% jump—amid $32.4 billion in trading volume on Binance. Technical indicators signaled bullish momentum: the RSI hit 68 (overbought territory), while the MACD line crossed above its signal line. But behind these charts lies a deeper story of institutional capital and structural shifts.
Ask Aime: Why is Bitcoin's price rising?
1. ETF Inflows and Institutional Adoption
The single largest catalyst has been U.S. Bitcoin ETFs. On a single day in early May, these funds saw $378 million in inflows, led by BlackRock’s iShares Bitcoin Trust (IBIT). This institutional demand has reduced Bitcoin’s supply on exchanges to the lowest levels since December 2021, signaling long-term holder accumulation. As retail investors return, AI-driven trading bots now account for 18% of automated trading volumes on Binance Futures, amplifying liquidity.
2. On-Chain Metrics: A Bullish Backstory
Glassnode data reveals a 12% surge in Bitcoin transactions during the May 4 rally, with 412,000 transactions in six hours. Even more telling: 68% of Bitcoin addresses were in profit by mid-May, up from 62% a week prior. This “whale activity” matters: 92% of Bitcoin is held by just 2% of addresses, meaning large holders can sway prices. Recent data shows these whales are net buyers, with wallets holding >10,000 BTC showing an accumulation score near 1.0—indicating aggressive purchases.
3. Cycle Dynamics: The Acceleration Phase
Historical Bitcoin cycles suggest we’re in the Acceleration Phase, a volatile period of high returns and speculation. The last two cycles (2013 and 2017) saw prices peak 6–9 months after this phase began. If history repeats, Bitcoin could hit $132,453 by mid-2025, per analysts’ forecasts.
Risks: Why This Rally Could Still Fail
While the bullish case is compelling, risks loom large.
Whale Power and Volatility
The top 2% of Bitcoin holders can trigger crashes with minimal selling. A $132,000 price tag also invites profit-taking. The RSI’s overbought status (68 on May 4) suggests a near-term correction is likely.
Regulatory Overhang
Despite quiet from regulators in 2025, the SEC’s stance on crypto remains uncertain. A sudden crackdown on ETFs or derivatives could drain liquidity instantly.
Energy and Mining Costs
Bitcoin’s energy consumption—equivalent to a small nation’s use—remains a vulnerability. Rising mining difficulty and costs could deter institutional adoption if ESG concerns resurface.
The Bottom Line: Bull Case vs. Bear Case
Bull Case (Likelihood: 65%)
- ETF inflows and whale accumulation sustain momentum.
- Bitcoin breaks $100,000 by mid-2025, targeting $132,000 by year-end.
- The Fear & Greed Index stays in “Greed” territory (65+), signaling retail FOMO.
Bear Case (Likelihood: 35%)
- Regulatory shocks or macroeconomic downturns (e.g., Fed rate hikes) reverse momentum.
- Profit-taking above $100,000 triggers a 30% correction to $70,000.
- Energy costs and mining competition erode Bitcoin’s store-of-value narrative.
Conclusion: Bitcoin’s Next Act
The evidence points to Bitcoin’s slump being temporarily over, with institutional capital and on-chain fundamentals driving a sustainable rally. Key metrics like exchange outflows, whale accumulation, and ETF inflows align with past bull markets. However, Bitcoin’s 2025 trajectory hinges on two critical factors:
- Resisting Overbought Conditions: A sustained breakout above $65,000 (now $95,000) would confirm upward momentum.
- Navigating Regulatory Crossroads: If the SEC greenlights more ETFs and avoids crackdowns, Bitcoin could reclaim its title as the world’s top digital asset.
Historically, Bitcoin’s Acceleration Phase peaks 6–9 months after it begins. With the current phase starting in late 2023, a $132,000 high by mid-2025 isn’t just possible—it’s mathematically probable. But as always with crypto, the path will be anything but smooth.
For investors, the message is clear: Bitcoin is back—but stay vigilant. The rally is real, but so are the risks.
Data sources: Glassnode, CoinGecko, blackrock, Crypto Rover, Santiment. Analysis as of May 2025.
