After climbing to a new all-time high of $124,128 on Wednesday, Bitcoin (BTC) has pulled back 6% to about $115,150, raising questions among investors about the sustainability of the current bull run. Alex Krüger, a prominent economist and crypto market analyst, shared his latest thoughts on X, providing a comprehensive overview of the current state of Bitcoin and the broader market.
Krüger emphasized that corrections from new highs often trigger excessive concern over the “cycle top,” noting that this pattern repeats every time Bitcoin retraces. He highlighted that Bitcoin is already seven times higher than its 2022 lows, and much of the recent rally has been driven by financial engineering from traditional finance (TradFi) via crypto treasury companies.
For traders worried about hitting a market top, Krüger advised selling or de-risking to avoid the risk of selling at the bottom during the next downward move. He also questioned the relevance of the so-called “four-year cycle” in 2025, suggesting that the pattern effectively ended two cycles ago and that the 2021 rally was largely macro-driven.
Comparing the current market to 2021, Krüger noted two major differences: the 2021 rally involved uncollateralized borrowing and extreme leverage, and the cycle ended due to the Federal Reserve’s ultra-hawkish policy in January 2022 rather than Bitcoin fundamentals or the halving event.
Looking ahead, Krüger believes the August 2024 price action provides a useful template for August 2025. He remains confident that the current cycle is not over, pointing to expected changes in Federal Reserve policy that could become significantly more dovish once U.S. President Donald Trump announces his nominee to replace Chair Jerome Powell.
In the short term, Krüger expressed a slightly bearish outlook leading into Powell’s upcoming speech at Jackson Hole, suggesting that a hawkish tone could make sense as the Fed seeks to maintain flexibility and avoid cornering the market. Nevertheless, he reaffirmed his expectation of a rate cut in September.
Technical Analysis and Market Dynamics
Krüger also highlighted technical factors, noting that Bitcoin is struggling to rise without leverage and is currently sitting at its trendline from April lows. Futures basis, a measure of market froth, has decreased significantly for both BTC and ETH in recent days.
Zooming out, he observed that Bitcoin now trades more like a stock, with lower volatility and gradual ascent, contrasting with the sharp pre-ETF breakouts. He stressed that bull markets rarely end due to valuations or over-extension alone; a significant trigger is required to mark the cycle’s conclusion.
