Bitcoin Cycle Index Signals Compression: Expansion Ahead

Key Points:

• Bitcoin’s Cycle Extremes Index at 8.8% signals a market in compression, historically preceding major expansion phases.
• 30-day volatility percentile rises from 3% to 9%, indicating the early stages of increased price activity and risk.
• Crypto adoption growth outpaces internet adoption, with projections nearing 942 million users by the end of 2025.

Bitcoin’s Cycle Extremes Index stands at 8.8%, placing it near the lower boundary of the compression zone. This reading reflects subdued network activity and reduced volatility within the ongoing 2023–2025 cycle.

However, such low levels have historically preceded strong expansion phases marked by sharp price movements and higher trading volume. Therefore, the current setup suggests a potential shift toward increased investor activity and market participation.

Volatility Indicators Begin Rising

Bitcoin’s 30-day volatility percentile has increased from 3% to 9%, indicating the start of an early expansion cycle. This change coincides with a recent price pullback from the latest all-time high near the $120,000 level.

Although the current volatility-based risk is 8.9%, still relatively low, the upward trend confirms evolving market conditions. Consequently, these indicators imply the beginning of a more active and possibly volatile market phase.

Price Pattern Nears Decision Point

Bitcoin’s price has formed a falling wedge pattern, which often signals a bullish breakout when near the apex. Currently, the pattern converges around $109,000, with price compression pointing to reduced selling pressure.

A breakout above the descending resistance line could confirm upward momentum, attracting more buying interest. But a break below $107,000 may trigger a false move and cause short-term losses.

Adoption Trends Reinforce Long-Term Outlook

Crypto adoption continues growing rapidly, with a trajectory still outpacing internet adoption during its early growth years. From 2016 to 2022, crypto users increased at an annual rate of 137% compared to the internet’s 76%.

By 2025, forecasts suggest crypto could reach nearly 942 million users, showing 43% annual growth from a significantly larger base. This global integration supports the long-term market outlook and rising investor interest.

Market Setup Points to Imminent Shift

The current technical and on-chain signals suggest Bitcoin is transitioning from a compressed phase into early expansion. As volatility increases and adoption strengthens, the market appears primed for heightened activity.

If price breaks out with confirmation, it could trigger the next leg of the bull cycle. However, continued caution is warranted as false breakouts remain a risk in compressed conditions.