Bitcoin’s price movements in 2024–2025 showcased a disparity between improving long-term onchain metrics and the restrictive macroeconomic landscape. Despite strengthened liquidity and supply dynamics during Bitcoin’s (BTC) 2024 surge, external factors such as high real yields and the contraction of the Federal Reserve’s balance sheet set limitations on valuations as the market evolved.
Key takeaways
Bitcoin surged past $100,000 from $42,000 in 2024, supported by increased stablecoin inflows and consistent BTC outflows from exchanges.
A significant BTC valuation indicator rose to 2.2 from 1.8 in 2024–2025 but stayed below the critical overheating threshold of 2.7.
In 2025, high real yields and balance sheet reduction may have curtailed BTC’s gains, even with a strong onchain framework.
Onchain strength fueled the 2024 surge
Starting 2024 at approximately $42,000, Bitcoin steadily climbed, exceeding $100,000 in the fourth quarter. This rally aligned with improved onchain liquidity conditions, where monthly ERC-20 stablecoin exchange inflows averaged between $38 to $45 billion, indicating a surplus of available capital in the crypto market.
Concomitantly, correlation analysis exhibited a negative rolling relationship of -0.32 between stablecoin inflows and Bitcoin exchange net flows, suggesting that incoming liquidity corresponded with BTC being withdrawn from exchanges.
This interplay mirrored accumulation-centric rallies rather than distribution, bolstering the durability of Bitcoin’s uptrend in 2024. It also coincided with the onset of spot ETF demand and long-term institutional positioning, steering clear of speculative, leverage-driven actions.
Valuation metrics reinforced this scenario. Bitcoin’s market value to realized value (MVRV) 365-day ratio increased from 1.8 at the start of 2024 to about 2.2 by year’s end.
On a high-timeframe analysis, the data indicated structural resilience rather than speculative excess, enabling prices to rise without inciting widespread profit-taking or forced liquidations.
Despite this, macroeconomic conditions diverged significantly from previous bull markets. Over 2024, U.S. 10-year real yields remained positive, averaging between 1.7% and 1.9%. Concurrently, the Federal Reserve continued its liquidity drain, reducing its balance sheet from $7.6 trillion to $6.8 trillion by year-end.
This $800 billion reduction heightened the opportunity cost of holding non-yielding assets like Bitcoin. Nonetheless, crypto-native liquidity mitigated the impact of tight financial conditions, allowing BTC to achieve a 121% gain in 2024.
Macroeconomic factors curtailed significant returns in 2025
The balance of power shifted in 2025. After reaching cycle highs, Bitcoin experienced volatility with significant price fluctuations between $126,000 and $75,000, even as the onchain structure largely remained intact.
Stablecoin exchange inflows peaked in late 2024 and early 2025 before falling by about 50%, indicating a reduction in marginal buying power. Exchange net flows became more unpredictable and failed to sustain rallies, suggesting a gradual distribution of supply.
Valuation patterns mirrored this change in dynamics. The MVRV 365-day SMA remained stable between approximately 1.8 and 2.2 throughout 2025, comfortably above bear-market levels, yet unable to expand further.
Statistical analysis across the 2024–2025 timeframe revealed that stablecoin inflows and exchange net flows explained less than 6% of MVRV variance, indicating that valuation dynamics were no longer chiefly influenced by onchain BTC movements.
Macro conditions remained crucial. U.S. real yields averaged between 1.6% and 2.1% in 2025, while the Federal Reserve balance sheet shrank further to $6.5 trillion from around $6.8 trillion, withdrawing an additional $300 billion in system liquidity.
In contrast to earlier Bitcoin bull cycles, which correlated with declining real yields and growing balance sheets, the 2025 scenario remained structurally restrictive.
Related: Short-term Bitcoin traders were profitable for 66% of 2025: Will profits rise in 2026?
Implications for Bitcoin’s Future
The insights from 2024–2025 suggest Bitcoin has transitioned into a phase where onchain metrics shape market structure, while macroeconomic factors impose valuation ceilings.
Stablecoin inflows and declining exchange balances help avoid severe drawdowns, yet another round of price discovery hinges on looser financial conditions.
For investors, this indicates that focusing solely on high-timeframe onchain data without considering macro factors may lead to incomplete insights. In the current cycle, Bitcoin’s next price surge is more likely to be activated by decreasing real yields or a resurgence in global liquidity, rather than exchange flows alone.
Related: Did Bitcoin’s 4-year cycle break, and is the bull market really over?
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
