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- Crypto Update: A New Bull Run Underway? (March 24, 2025)
Crypto Update: A New Bull Run Underway? (March 24, 2025)
We review Bitcoin in the broader macro context and dive into the price technicals of BTC, ETH, SOL, XRP, COIN, MSTR.
Yimin Xu
March 24, 2025
Hi YXI friends,
Bitcoin enjoyed a very dull week last week trading in a tight $82-86k region. That’s not actually a bad thing given the broader free-falling context of the market.
All of the sudden, Bitcoin moved higher on Sunday, and is now trading at $88k (NY Hours, Monday March 24, 2025). Is the new bull run under way?
We will review Bitcoin in the broader macro context first, before diving into the nitty gritty of price technicals for BTC, ETH, SOL, XRP, COIN, MSTR.
Table of Contents
DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
1. Bitcoin Is Macro
It has been an interesting month to say the least for the markets.
What I have noticed is how many people have turned more bearish as the month went on, despite the risk assets having already put in a local bottom before mid-month. There have been visibly more people calling for lower lows on Bitcoin, Tesla, and broader equities.
One thing I have learnt over time is that Bitcoin tends to turn at the least expected moments (by the mainstream that is).
US 10Y Treasury Yield vs Bitcoin vs SPY
In this particular context, Bitcoin actually led SPY and QQQ in forming a local bottom, a week after yields had bottomed.
Note that in the latest market correction since February, risk assets and yields headed the same direction, as investors piled into bonds for safety. This is typical of the risk-off environment.
Bitcoin Macro Correlations
In fact, Bitcoin’s correlation with 10-year yield climbed into a pretty high 0.62 territory, while its correlation with SPY also surged to 0.45.
Bitcoin is also negatively correlated with USD (DXY). But I think this is a slightly misleading point.
Bitcoin (Yellow) vs DXY (Blue)
On any given day, Bitcoin tends to trade inversely with DXY (i.e. a stronger USD suppresses Bitcoin on the day). But in terms of the larger picture, Bitcoin followed DXY’s trend in both the run-up around the US Election and the latest fall post New-Year.
Bitcoin (Yellow) vs US-Japan 10Y Yield Spread (Blue)
In particular, Bitcoin and US-Japan yield spread moved in lockstep since late January, right after BOJ’s interest rate hike on January 24.
A coincidence? I don’t think so. While the size of the global carry trade since also August has declined, carry is going to be a forever global favourite.
This is because investors are fundamentally lazy - if you can borrow cheaply and get high returns, why do anything more fancy? Carry also provides the illusion of safety, because the sizeable yield spread represents a big cushion.
The collapse of the US-Japan yield spread, by nearly 100bp, meant cost of borrowing has shot up significantly for leveraged players, forcing investors to dump risk assets.
Therefore, we have a few macro variables to watch for Bitcoin to sustain a rally.
Bitcoin vs G5 M2 Money Supply
Finally, we continue mapping out the relationship between Bitcoin and G5 M2 Money Supply (in USD) changes with an 11-week lag (G5: US, China, EU, UK, Japan). We are now entering the final week of the G5 M2 trough, where the M2 dipped from $92.4T to $92.0T 11 weeks ago.
It should be noted that the relationship is a high level one, and by no means holds high intra-day correlations. I would caution against trying to map the relationship to perfection. Only if trading is that simple!
You can think of the M2 lag as the direction of the wind - birds can fly the opposite way, it’s just more effort.
IBIT ETF Flows
After weeks of red, IBIT has finally seen some inflows coming back, to the tune of $400 million in the past week. This coincides with IBIT climbing above its 5-day EMA, triggering momentum buyers.
2. Price Analysis: BTC, ETH, SOL, XRP
Bitcoin Chart
Given we are in the early stage of a recovery, we keep the observations simple here. Bitcoin has just climbed above the 200 EMA, which is constructive. It is still below the resistance trend line since the January high. It needs to break above it and retest to confirm the bottom.
Meanwhile, for the wave 4 correction, BTC retraced 50% of wave 3, but there is room for a lower low at the 0.618 retrace around $69k. Therefore, for early dippers, I like seeing stops at the March 11 low.
Right now, we don’t have much to play with on the smaller degree to map out the extensions.
Bitcoin Correlations with ETH, SOL, XRP
Since the beginning of March, Bitcoin, Ether, Solana, Ripple have behaved in a very correlated manner, but this is quite typical in a risk off mode, where investors indiscriminately sell risk assets.
I suspect as the bull market resumes (which I believe it will), we will see some dispersion between the asset returns.
Ether Chart
In the near term, given the high cross-crypto correlations, I would say simply follow Bitcoin’s lead for the next moves in alts.
However, from an Elliott Waves perspective, I would caution that we could still have the final leg of wave C lower below $1500. This would be proportionate for wave C = A.
There is a more bullish argument to be had, which is to ignore the long wick of wave circle-a on Feb 3, and focus on the closing prices. It was clearly an intraday panic. This would make the March low already at equal proportion to wave a. But I am not entirely sure about this argument - intra-day panics are exactly the capitulation sign that we look for in the final stage of a down wave.
Solana Chart
I personally lean towards SOL to have bottomed here, due to the extension of wave C. However, the latest bounce is insufficient in length yet to make that opinion a conclusion. We still need to see the 5 waves up first.
Ripple Chart
Ripple has stood its February and March lows still. Therefore, I don’t see any reason to change my bullish expectation of it moving in wave 5. Currently wave iii can be as high as $4.56.
3. Price Analysis: COIN, MSTR
Bitcoin Correlations with COIN and MSTR
Bitcoin is highly correlated with COIN and MSTR, even though COIN is technically an exchange rather than a crypto asset. But this makes COIN an excellent proxy exposure to Bitcoin for those unable to trade ETFs or underlying spots.
COIN Chart
The bigger picture for COIN is that it typically climbs 100-150%, subsequently retraces 40-50%, and only to do it all over again, since 2023.
This time was no different, as COIN declined by 50% from peak to trough. It should be nearing the end of the decline by historical standards.
I struggle to see the larger degree wave (5) having topped in December, given my cross asset view on Bitcoin as well as the company fundamentals.
If COIN bottoms here - there is certainly room below from an EW perspective - my expectation for the final wave (5) is $450+, which is the inverse 1.382 extension of wave (4).
Meanwhile, 200 EMA first.
MSTR Chart
MSTR fell short of my wave C target, and I am not entirely sure if it would reach it still. Investors use it as a leveraged play on Bitcoin. If Bitcoin recovers next, MSTR likely explodes higher.
My wave (5) target, based on the assumption we bottomed already, is $760+, which is the inverse 1.382 extension of wave (4) like COIN.
It may sound very ambitious, but that’s MSTR for you.
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