In its latest analysis evaluating the outlook for the cryptocurrency market in the coming years, The DeFi Report argued that Bitcoin may be entering the early stages of a new bull cycle. The platform, which divides the market cycle into four phases – “early bull,” “wealth creation,” “wealth distribution,” and “wealth destruction” – stated that the current market structure is signaling a transition to the first phase.
According to The DeFi Report, a critical indicator for confirming the early bull phase will be Bitcoin establishing support around the 50-week moving average at approximately $80,000. The analysis notes that this period historically lasts about 9 to 12 months, with crypto-focused investors starting to notice speculative activity before the broader investor base. The report also lists rising Bitcoin dominance from its lows, the return of new users, increased DeFi incentives and marketing spending, and the launch of new projects as other indicators to watch during the early bull period.
According to the platform’s assessment, the second phase of the bull cycle, the “wealth creation” period, is expected to see a more pronounced rise in Bitcoin, increased interest in cryptocurrencies from mainstream media, and accelerated influx of new investors. During this phase, demand for DeFi loans, leverage usage, stablecoin supply, and on-chain activity are expected to increase. The DeFi Report notes that trading volume on Solana decentralized exchanges increased approximately tenfold during this period in the previous cycle, and that funding rates and open positions in Bitcoin futures markets are also expected to rise.
The analysis noted that risks would begin to increase in later stages of the cycle. The DeFi Report specifically stated that high-yielding speculative assets could peak months before Bitcoin reaches its peak, and capital could shift to different sectors. The platform explained that investors had begun to gradually exit high-performing assets in the previous cycle, and that a structure had emerged in the market’s “wealth distribution” phase where old investors were realizing profits while new investors entered the market.
The DeFi Report’s approach also places significant emphasis on on-chain data. The platform states that blockchains differentiate the crypto market from traditional assets by allowing the tracking of investor costs, coin movements, and leverage accumulation. Accordingly, how coins change hands among investor groups with different cost bases is considered one of the key indicators for understanding which phase of the market cycle the coins are in.
The DeFi Report also believes that the upcoming bull cycle could be stronger than the previous one. The platform argued that factors such as the Fed’s balance sheet reduction, persistently high interest rates, the rise of AI attracting investor interest, and gold outperforming Bitcoin limited the crypto market’s upward trend in the previous period. In contrast, it suggested that more supportive liquidity conditions, greater integration of Bitcoin into the traditional financial system, the increasing adoption of cryptocurrencies, and the development of mobile application infrastructure could create a more favorable environment for the market in the new period.
On-chain perpetual trading platforms were also highlighted as a key area. The DeFi Report noted that Lighter, operating within the Ethereum ecosystem, caught their attention due to its product structure and leverage of Ethereum security, and that the platform subsequently began directing a significant portion of perpetual trading volume through Robinhood.
According to The DeFi Report, the pattern of cryptocurrency markets historically repeating itself is that periods of expansion lasting nearly three years are followed by bearish periods of approximately one year.
*This is not investment advice.
