08 August 2025

Sentiment is a funny thing. It changes direction in no time. We had one such this week. Bitcoin was going to retest early $110,000s before Trump signed an executive order to allow crypto in 401(k) US retirement funds. This is a big deal. Passive investing for the long term can happen via these funds, sustaining demand and bringing legitimacy to the asset class. And, along with this, the probability of a US interest rate cut in September has increased from 38% to 95% in just a week!

Naturally, Bitcoin breezed past some key resistance zones while altcoins regained their July highs in no time. This is the strength of crypto. And this is the rally mode we want. Off to the races!

In our Hot Take today, we look at Bitcoin in August – where are we heading next?

Top-3 stories of the week:

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The newsletter is put together by Giottus Crypto Platform. You can read all the previous issues of Cryptogram here.

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WEEKLY MACROS

• Total crypto market cap - $3.87 trillion - UP 3.5%    

• Bitcoin price - $116,725 - UP 1.7%

• The dollar index (DXY) - 98.23 - DOWN 1.8%

• Bitcoin Dominance - 60.82% -  DOWN 1.7%

• Crypto Fear and Greed Index - 74 - Market is in Greed

THE HOT TAKE

Bitcoin’s August Playbook 🚀

Bitcoin’s recent chop was classic bull market behavior, if you know what to look for. A sharp drop below $112,000 sent jitters across the market, flushing out over-leveraged traders in one swift move. But true to form, BTC has bounced hard, reclaiming $116,000 as solid local support and reminding everyone just how quickly momentum can flip on its head.

These kinds of pullbacks aren’t signals to panic – they are rather shaking weak hands before the next surge. Right now, most key metrics still align with the mid-phase of a bull run. BTC’s retrace has simply revisited its previous highs, retesting them now as support, a pattern that has typically held up in every cycle.

Let us rewind the tape to track Bitcoin’s August action in the past bull cycles.

The question: is the stage once again set for August to deliver the next move? We break it all down inside.

Let’s begin with historical monthly returns in post halving years

Post-halving years have a clear trend: August tends to be a strong month for Bitcoin.

• In 2013, BTC rallied over 30%

• In 2017, BTC surged 65%

• And in 2021, BTC posted a 13% gain

Now, with August 2025, the setup looks familiar. Bitcoin is consolidating near local highs, sentiment remains cautious but constructive, and broader macro conditions are beginning to shift risk-on. Historically, this combination has acted as a springboard for the next phase of the cycle.

However, if we are to compare Bitcoin performance on the whole across its entire history, August doesn’t have the cleanest track record for BTC. Historically, it’s been a volatile month marked by low volumes, macro uncertainty, and consistent sell pressure. Median returns? A sharp -7%.

August SOPR Patterns

SOPR (Spent Output Profit Ratio) has consistently reflected key shifts in market behaviour during August of post-halving years, often signalling the start of strong upward momentum. When SOPR trends above 1, it indicates that coins are being sold at a profit, typically coinciding with renewed confidence and bullish price action. This pattern has played out in multiple cycles, with August serving as a launchpad for major rallies.

• 2013: SOPR was deep in profit-taking zones as momentum accelerated toward the year-end peak above $1,000

• 2017: A 65% surge came alongside major technical upgrades like SegWit, pushing SOPR into elevated ranges as investors locked in gains ahead of Bitcoin’s run to $20,000

• 2021: SOPR stayed modestly above 1, signalling measured optimism following a deep correction and setting the stage for new all-time highs in Q4

In each case, rising SOPR during August reflected improving sentiment and increased profit realization, both of which preceded powerful moves higher. As August 2025 unfolds under similar conditions, SOPR will be a key metric to watch for signs of another potential breakout.

 MVRV Z-Score Signals Pre-Top Accumulation

MVRV Z‑Score has consistently served as a powerful gauge of Bitcoin’s valuation extremes, highlighting when the market is overheated or undervalued relative to its on-chain cost basis.

1. August 2013 – Z-Score: 2.06

• What followed: After August 2013, the Z-Score continued to rise rapidly

• It surged into the red zone (~>7) by late 2013, which coincided with a massive price rally in Bitcoin, reaching a cycle peak

• This was followed by a sharp decline, marking the start of the 2014 bear market

2. August 2017 – Z-Score: 2.43

• What followed: The Z-Score and Bitcoin price both increased dramatically in the months following

• By December 2017, the Z-Score again reached the red zone, and Bitcoin hit its then all-time high near $20,000

• This marked the end of the 2017 bull market, followed by a multi-year bear market through 2018

3. August 2021 – Z-Score: 2.52

• What followed: There was a second wave of price increase leading into November 2021, where Bitcoin reached a new all-time high

• The Z-Score spiked again toward the red zone, though slightly lower than prior cycles

• This marked the final top of the 2021 bull market, after which the market entered a prolonged bear phase throughout 2022

Across all three years, a Z-Score around 2–2.5 in August was a precursor to a major price rally within ~2–4 months. Each rally led to the Z-Score entering the overheated red zone (~>7). This was followed by a cycle peak and a sharp correction or bear market.

Given the current MVRV Z-Score of 2.44, history suggests we may be entering a phase like those seen in previous cycles, where the Z-Score hovered around this level before a major price rally. While past performance doesn't guarantee future outcomes, the current reading indicates that market sentiment is heating up, and if this pattern holds, we could see a significant upward move in the coming months, potentially followed by a new cycle peak.

Key Takeaway

August 2025 may be shaping up to follow the familiar arc of past post-halving years, a period of consolidation that sparks a powerful second leg of the bull cycle. Historical patterns, from SOPR strength to MVRV Z-Score signals, all point to a market entering a phase of renewed risk appetite and rising confidence. Bitcoin has already retested previous highs, sentiment remains cautiously bullish, and early on-chain metrics are hinting that upside momentum could soon resume. Adding weight to the narrative is the surge of institutional demand via ETFs and corporate treasuries. July alone saw a record $6 billion inflow into Bitcoin ETFs, while public and private entities collectively keep adding BTC to their treasuries.

The key lies in its structural setup: unlike past August slumps, we now see strong support zones, improving macro outlook, and on-chain behaviour that mirrors the early stages of previous cycle tops. If the setup holds, history may rhyme once again and August could be the launchpad for renewed strength towards new highs.

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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.