Macro Driving Market Moves: Could The Next Parabolic Move In Crypto Come Sooner Than We Think?

Because of its nature, the cryptocurrency market provides investors with continuous investment possibilities over several cycles. With the present consolidation, investors have a great chance to generate long-term risk-adjusted returns. Because the US president is pro-crypto, Bitcoin achieved a remarkable 100% return in a few months during the preceding rally, rising from $54,000 in October 2024 to an all-time high of $109,200 in January 2025. Short-term consolidation has resulted from investors' growing fears about economic uncertainty in recent weeks.

A new study by 10x Research indicates that investors who joined the market over the previous three months are responsible for almost 70% of the downward pressure on markets. However, a bullish momentum might be triggered by a number of reasons under the present market conditions amid the establishment of a Strategic Bitcoin Reserve, the stream of cryptocurrency exchange-traded funds (ETFs) pending SEC clearance, and better regulatory clarity. Can investors anticipate a parabolic rise in cryptocurrency this year as the continuing global tensions subside and investors gain greater clarity on the Federal rate cuts? Let's analyse the questions and answers derived from an interview with Mr Edul Patel, Mudrex's CEO and co-founder.

1. Have we seen the peak of the 2025 crypto boom?

Bitcoin reaching an all-time high of $109,200 is just one part of the bull run. Typically, during the peak of a bull run, we will see the entire crypto market, including medium and small-cap tokens, outperform Bitcoin-which is known as the Altcoin season, and we are yet to see this. One of the biggest drivers of this cycle is the increasing regulatory clarity surrounding crypto. As more countries introduce clear frameworks for crypto trading and investing, capital from both institutional and retail investors will flow into the market.

This phase allows investors to take profits and new capital to accumulate, setting the stage for the next leg of the bull run. As liquidity increases and retail investors enter the market, we could see a much broader rally, extending beyond Bitcoin and into the wider crypto ecosystem. If historical patterns hold, this next phase could lead to even higher valuations across the board, pushing the total crypto market cap to new highs.

2. Will Ethereum lead the next crypto rally in 2025?

Since its launch in 2015, Ethereum has emerged as the largest altcoin, becoming popular for its technological innovations like smart contract functionality, low transaction fees and scalability. Over the past few months, ETH has been underperforming compared to its peers. In fact, it has fallen to a 16-month low, trading near $1800. However, there is definitely potential for ETH to outperform in the upcoming rally, given that multiple factors are in place.

One of the main reasons for the pullback in ETH is institutional selling. As the market sentiment changes, we could see institutional investors resume buying, which will position Ethereum towards new highs. On the other hand, Trump's Defi platform, World Liberty Financial, holds close to 30% of its assets in ETH, showing its relevance in the Defi space. As its utility grows, the price of the token is bound to grow.

3. Is it too late to buy the dip in crypto?

In the financial markets, it is never too late to buy the dip. The nature of the crypto market is such that it offers investors continuous investment opportunities across various cycles. The current consolidation is such an opportunity for investors to take advantage of strategies like dollar cost averaging to gain better risk-adjusted returns over the long run. Investors should deploy their capital in phases to make the most out of the market volatility.

4. Will Altcoins recover with Bitcoin or lag behind?

Typically, the market moves in cycles. Each cycle has different phases that are followed. At first, capital flows into Bitcoin, triggering a rally. During this phase, Bitcoin's dominance remains on the higher end. After this, the money flows into large-cap tokens like Ethereum, Solana and other major coins. This cycle ensures that during a bull run, all the coins have a chance to recover and thrive, making new highs in the market.

5. Can we still expect a parabolic move in crypto this year?

During the previous rally, we saw Bitcoin go up from $54,000 in October 2024 to an all-time high of $109,200 in January 2025, giving an impressive 100% return in just a few months based on the narrative of having a pro-crypto president in the US. Since then, many developments on the regulatory front and the market front have created a bullish environment for the market. The strategic Bitcoin Reserve and crypto stockpile of major tokens like XRP, SOL and ADA is a statement from the Trump administration to integrate crypto into the financial ecosystem. It is a matter of time before we see a "Parabolic" in Bitcoin followed by other tokens.

6. What's holding crypto back right now? Is it just market cycles?

In the past few weeks, concerns over economic uncertainty grew among investors, which has led to a short-term consolidation. The tariffs levied by Trump on neighbouring countries like Canada, Mexico, and others have increased inflationary pressures along with rising geopolitical tensions, leading to a market-wide correction. In hindsight, such consolidations are necessary for the market to build momentum for the next leg of the rally. On the other hand, the expectations of a Fed rate cut limiting to just one rate cut in 2025 slightly hurt investor sentiment, adding to the selling pressure. However, the encouraging CPI and Jobs data in the last 2 months show a resilient economy, indicating a trend reversal soon.

7. Is now the right time to accumulate Bitcoin or stay in cash?

I would advise investors to accumulate Bitcoin in a phased manner. No investor can time the exact bottom or the exact top of an asset. To take advantage of the correction and not miss out on the opportunity, investors should create SIPs on their crypto investments. Currently trading at a 30% discounted price, investors can start accumulating here and continue adding more Bitcoin during any pullbacks.

8. Is the market shaking out weak hands before the real pump?

The current consolidation is shaking out the weak hands before the next leg of the rally. According to a recent report by 10x Research, about 70% of the selling pressure is coming from those investors who entered the market in the last 3 months. This indicates that many newcomers, who were likely brought in during the recent price surge, are now panic-selling at the first signs of volatility. On the other hand, long-term investors-often referred to as "diamond hands"-understand market cycles and remain unaffected, holding onto their positions. As short-term traders exit the market, Bitcoin and other crypto assets consolidate at higher support levels, giving way for a healthier and more sustainable uptrend.

9. How low can crypto go before the next explosion upward?

Considering the current technical factors, Bitcoin has strong support near the $79,000 mark. However, the Fear-Greed Index that measures investor sentiment is at 21, indicating fear in the market. On the other hand, the markets are also quickly reacting to the rising geopolitical tensions. In any case, if the support at $79,000 is breached, BTC could test the support at $75,000 before resuming the rally.

10. Could the next Crypto all-time high come sooner than we think?

In the current market conditions, there are many factors that could trigger a bullish momentum. Increasing regulatory clarity, the establishment of a Strategic Bitcoin Reserve, and the pipeline of crypto ETFs awaiting SEC approval all serve as catalysts that could drive the next leg of the bull run. Once the ongoing geopolitical tensions ease, and investors get more clarity on the Federal rate cuts, we could see Bitcoin touching new all-time highs soon.

11. Will institutional buying return to spark the next leg up?

During the bull run at the beginning of 2024, institutional investors played a crucial role, injecting nearly $100 billion into the crypto markets and driving Bitcoin to new heights. However, in recent months, institutions have pulled back approximately $5.4 billion, reallocating capital toward traditionally safer assets such as U.S. Treasury yields amid rising economic uncertainty. That said, institutional sentiment toward crypto could shift with the introduction of the Strategic Bitcoin Reserve. As the reserve reinforces Bitcoin's long-term credibility, we may see institutions transition from net sellers to net buyers in the months ahead, bringing renewed confidence to the market.

Additionally, as central banks and sovereign funds begin to explore digital assets, the narrative around Bitcoin as a strategic reserve asset is strengthening. A more structured regulatory environment, combined with growing corporate and government interest in Bitcoin, could accelerate institutional reinvestment.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.