Bitcoin Report – February 2025

Today our Independent Research Analyst, Isaac Ho from the Ainslie Research Team brings you the latest monthly deep dive specifically on Bitcoin – including market analysis, on-chain metrics, sentiment, and technical analysis. He highlights some of the key charts that were discussed and analysed by our expert panel in the latest Beyond the Block episode and expands upon his work with some additional insights. We encourage you to watch the video of the original presentation if you haven’t already.

Since our last update, we remain range-bound once again. Given where we are in the cycle and based on timing things look very promising according to the data. The red trendline placed on the chart below highlights a potential top target for this cycle, considering the principle of diminishing returns as the asset grows in market cap. Regardless, the fact remains that each cycle top has coincided with a rapid increase in the ratio, signifying major demand for Bitcoin. As of now, we have yet to see price action typical of this phase of the cycle. This will be a key metric in determining when to shift our bias from bullish to bearish.

The Fear and Greed Index is painting a picture that aligns perfectly with what we would expect heading into a weekly and daily cycle low. Typically, sentiment drops significantly during these lows, which is a positive sign because the price remains relatively strong. Historically, this indicates a higher likelihood of upside movement in the coming months.

The FOMO Finder provides a broader perspective on sentiment. As shown, every time we see purple candles, it signals an opportunity to enter the market. These moments coincide with fear-driven sentiment and generally align with weekly cycle lows, making for high-probability setups. Currently, we have not yet seen a purple candle. However, a weekly cycle does not necessarily require one, as it can be time-based and still resume to the upside.

Looking at the RSI, we see a similar pattern to the 2017 bull run. This is promising because, while many may assume we are overextended, the reality is that we can remain within these bands for an extended period—especially during this phase of the bull market.

Google Trends aligns with the broader weekly cycle backdrop. A decline in interest, paired with low sentiment, creates the perfect conditions for a market reversal. Leading up to Trump’s election, we observed a surge in interest, followed by a decline. This pattern is not unusual and contributes to an ideal setup for potential upside movement.

The same principle applies here, with the only difference being the specific search terms used. These search terms have significantly higher search volumes compared to the previous dataset.

Active addresses further reinforce this narrative, showing a decline in interest and sentiment despite the price hovering around all-time highs. To confirm a market top, we would ideally see a significant increase in active addresses, similar to past cycle peaks.

Looking at BTC cycles, it is clear that we have entered the green timing band. This band serves as a bias switch—the denser the green, the more likely it is that the top is in. Additionally, during this phase, we typically observe the fastest price appreciation, which generates top-heavy signals such as MVRV and the Pi Cycle Indicator.

Weekly cycles, combined with the weekly stochastic, suggest that we are approaching a bottom soon. Historically, this has been followed by an 80%–100% price increase. While the data indicates we are becoming oversold, a temporary drop below the range lows would be typical for a weekly pivot.

The 60-day cycles align with the weekly cycle, reinforcing the broader trend. Given that this is unlikely to be the cycle top, we have two possible scenarios. The first is a time-based cycle low, where entering the expected timeframe and seeing a bullish reversal confirms the cycle low. The second is a sharp decline into the due date, the more common outcome. However, given Bitcoin’s current strength, it appears more likely that we will see a time-based low.

The liquidation map highlights significant liquidity levels to the upside, which could fuel a strong move if triggered. While there are some downside levels, their nominal value is much lower than we see above. This is evident when examining the Y-axis of the graph. Overall, the data remains very bullish.

Watch the most recent video presentation of Bitcoin Analysis: Beyond the Block where we share some of these explanations in a panel format, and join the discussion on our YouTube Channel here:

We will return with a more detailed analysis of everything Bitcoin next month, including more market analysis, on-chain metrics, sentiment, and technical analysis…

Isaac Ho
Independent Research Analyst
The Ainslie Group

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