Bull Market or Bubble? Understanding Crypto’s Final Stretch | by Tracy Hardwick | The Capital | Jan, 2025

The crypto market has been on an incredible run, but the big question remains: Are we nearing the peak? Recent insights from CryptoQuant suggest that we could be entering the final stage of this bull market. While there’s still potential for gains, this phase calls for a more cautious and strategic approach.

Here’s what the data says and how you can prepare for what’s next.

CryptoQuant highlights several key indicators that point to the later stages of this cycle:

1. A Surge in Short-Term Bitcoin Holders
   In the final quarter of 2024, the percentage of Bitcoin held for less than one month jumped to 36%. Historically, this kind of short-term activity tends to occur near market tops, as new and existing investors rush in to catch the upward momentum.
2. Altcoin Mania
   Altcoins have been booming, with many seeing rapid price increases. This trend often marks the later phases of a bull market, where speculative behavior outpaces long-term investment.
3. Flood of New Investments
   The market has seen a sharp influx of new funds, which can fuel further price increases but may also signal the final rush before a correction.

While CryptoQuant urges caution, some analysts believe there’s more upside to come. Here’s why:

• Institutional Demand Remains High: Institutional investors continue to allocate capital to Bitcoin and other digital assets, signaling strong demand.
• Regulatory Developments Could Spur Growth: Expected approvals of new crypto products, like exchange-traded funds, could bring even more mainstream investors into the market.
• Bitcoin’s Halving Effect: The next Bitcoin halving in 2024 is expected to reduce supply, which has historically driven significant price increases in the following year.

Whether we’re nearing the peak or still have room to grow, it’s crucial to have a clear plan. Here are some tips to help you make the most of this phase:

1. Set Realistic Profit Targets: Decide in advance how much profit you’re aiming for. Taking profits in stages as prices rise can help you lock in gains without completely exiting the market.
2. Diversify Your Portfolio: Don’t rely solely on one or two assets. A balanced portfolio that includes both established cryptocurrencies and carefully chosen smaller projects can help spread your risk.
3. Prepare for Volatility: As the market reaches its later stages, price swings may become more dramatic. Staying calm and sticking to your strategy is key to avoiding panic-driven decisions.
4. Focus on Quality Projects: Look for coins with strong use cases, active development teams, and engaged communities. These projects are more likely to hold value, even during market corrections.

The crypto market may be entering its final stretch, but there are still opportunities for those who approach this phase wisely. Whether we see a peak soon or continued growth in 2025, staying informed and managing risk will be essential.

This isn’t the time to get swept up in hype. It’s the time to stay focused, stick to your strategy, and make decisions with clarity. By doing so, you’ll be better positioned to capitalize on the remaining opportunities while safeguarding your investments for the long haul.