Regulators and Liquidations Challenge Crypto’s Bull Cycle Peak

Bitcoin, Ethereum, and Solana have all shown signs of weakness in recent weeks, with broader market dynamics pointing to a potential end of the two-year bull run. Technical and cyclical indicators, including Bollinger Bands and the Relative Strength Index (RSI), suggest a market peak likely between August and October 2025. The RSI has approached overbought levels—historically associated with major cyclical peaks—while Bitcoin's price remains approximately 30% above its monthly moving average. Altcoins, including Solana and Ethereum, have narrower margins of safety, with deviations as low as 10% from key levels, raising concerns about volatility and potential downward correction.

The market is also facing structural pressures. Institutional players are increasingly liquidating positions, particularly in major crypto treasuries that hold large amounts of Bitcoin and Ethereum. These forced sales tend to persist over extended periods, resisting traditional technical analysis and amplifying market instability. Additionally, the U.S. Treasury Department is considering implementing KYC (Know Your Customer) requirements for all stablecoin-related activities, which could disrupt the flow of capital and liquidity in the crypto ecosystem. Regulatory uncertainty adds to the broader risk environment, especially with the potential for renewed geopolitical tensions as trade pauses between major powers expire.

Ethereum, in particular, is under pressure from both regulatory and competitive challenges. A growing number of blockchains, such as Solana, are attracting traders who prioritize transaction speed and efficiency over full decentralization. Additionally, new EVM-compatible blockchains from fintechs and stablecoin issuers are beginning to erode Ethereum’s dominance by capturing value streams that were once exclusive to its network. Institutional activity also presents a threat to Ethereum’s decentralized nature. BlackRock holds 3.5 million ETH through its ETF, representing 55% of the Ethereum ETF market. The possibility of staking rights for these tokens raises concerns about centralization and the potential for traditional institutions to exert greater control over the network.

Bitcoin, historically resilient even during sharp corrections, has yet to fall below its previous cycle peak of approximately $70,000. Analysts suggest that the likely floor could be around this level, with a possible range of $60,000 to $80,000 depending on the intensity of liquidations and market sentiment. However, market psychology often determines the true bottom—when the majority of investors believe the cycle is over, the floor is likely to be reached. This often coincides with the collapse of a major overleveraged entity, triggering a wave of forced selling and sentiment-driven panic.

Despite the bearish signals, some altcoins still present upside potential, particularly in the final phase of the bull cycle. Ethereum and Solana are gaining traction and may still see further gains before the market corrects. Investors are advised to adopt a staggered profit-taking approach, securing gains at key resistance levels while maintaining exposure for late-cycle rallies. This strategy is especially important for those with limited capital or low risk tolerance, as the market appears to be approaching a turning point.