Original Author: @BlazingKevin_, the Researcher at Movemaker

The Starting Point of Bitcoin's Structural Slow Bull Market Has Formed

I believe we are at the starting point of a long cycle, even a decade-long slow bull market for Bitcoin. Phenomenally, the key turning point that has driven this trend is the approval of Bitcoin ETFs at the end of 2023. From that moment on, the market attributes of Bitcoin began to undergo a qualitative change, gradually transforming from a completely risky asset to a safe-haven asset. Currently, we are in the early stages of Bitcoin becoming a safe-haven asset, but at the same time, the U.S. is entering a rate-cutting cycle, thus providing Bitcoin with a favorable growth space. The role of Bitcoin in asset allocation is shifting from "speculative object" to "asset allocation tool," stimulating longer-term demand increments.

This evolution of asset attributes coincides with a turning point where monetary policy is about to shift from tight to loose. The Fed's rate-cutting cycle is not an abstract macro background but a substantial price signal that affects Bitcoin.

Under this mechanism, Bitcoin will exhibit a new operational characteristic: whenever the market shows signs of a pullback after excessive enthusiasm, there will be a wave of "liquidity" entering the market just as prices are about to enter bear market territory, interrupting the downward trend. We often say that "liquidity is abundant but unwilling to bet" in the market, but this statement is not entirely accurate. Other altcoins lack mid-term allocation logic due to evaporating valuation bubbles and unproven technologies; Bitcoin, at this time, becomes "the only certain asset to bet on." Therefore, as long as loose expectations remain and ETFs continue to absorb funds, it will be extremely difficult for Bitcoin to form a traditional bear market throughout the entire rate-cutting cycle, experiencing at most periodic pullbacks or localized bubble clearings due to sudden macro events (such as tariff shocks or geopolitical risks).

This means that Bitcoin will traverse the entire rate-cutting cycle as a "quasi-safe-haven asset," and its price anchoring logic will change accordingly—from being "driven by risk appetite" to gradually transitioning to "supported by macro certainty." Once this rate-cutting cycle ends, over time, as ETFs mature and institutional allocation weights increase, Bitcoin will also complete its preliminary transformation from a risky asset to a safe-haven asset. Subsequently, when the next rate-hiking cycle begins, Bitcoin is likely to be genuinely trusted by the market as a "safe haven under rate hikes" for the first time. This will not only enhance its positioning in traditional markets but may also allow it to gain some capital siphoning effect in competition with traditional safe-haven assets like gold and bonds, thus initiating a structural slow bull market that spans a decade.

Looking ahead to the development of Bitcoin in several years or even a decade is too far off; it is better to first consider the potential triggers that could lead to a significant drop in Bitcoin before the U.S. truly shifts to consistent easing. From the first half of this year, tariffs are undoubtedly the most disruptive event to market sentiment, but in reality, if we view tariffs as a benign adjustment tool for Bitcoin, we may gain a different perspective on their potential future impact. Secondly, the passage of the GENIUS Act marks the U.S. acceptance of the inevitable decline of the dollar's status and actively embraces the development of Crypto finance, amplifying the multiplier effect of the dollar on-chain.

Viewing Tariffs as a Benign Adjustment Tool for Bitcoin, Rather than a Black Swan Trigger

In the tariff process over the past few months, it is evident that Trump's primary policy direction is focused on manufacturing repatriation and improving fiscal conditions, while simultaneously targeting major competitor countries. In pursuit of improving government finances, Trump may sacrifice price stability or economic growth. Consequently, the U.S. government's fiscal situation has deteriorated rapidly during the pandemic, with the yield on 10-year Treasury bonds soaring over the past few years, causing the government's interest expenses to more than double within three years. The revenue generated from tariffs accounts for less than 2% of the federal tax structure; even if tariffs are raised, the revenue they generate is negligible compared to the enormous interest expenses. So why does Trump keep emphasizing tariffs?

The purpose of tariffs is to determine the attitude of allies and secure protection.

According to the systematic explanation of the role of tariffs by Milan, Chairman of the White House Council of Economic Advisers, in his article "A User's Guide to Restructuring the Global Trade System," it is clear that tariffs are an "abnormal tool for market intervention," used in crises or confrontations. The strategic logic of U.S. tariff policy is increasingly aligned with the route of "fiscal weaponization," meaning that by imposing tariffs, the U.S. not only "self-finances" but also seeks to "rent-seek" externally on a global scale. Milan points out that in the context of a new Cold War, the U.S. no longer pursues global free trade but attempts to restructure the global trading system into a "friend-shoring trade network" centered around the U.S., forcing key industrial chains to shift to allied countries or back to the U.S. and maintaining the exclusivity and loyalty of this network through tariffs, subsidies, and restrictions on technology transfer. Within this framework, high tariffs do not signify the U.S. withdrawal from globalization; on the contrary, they are a hegemonic tool aimed at regaining control over the direction and rules of globalization. Trump's proposal to impose high tariffs on all Chinese imports is not fundamentally about decoupling but rather about forcing global manufacturers to "take sides," shifting production capacity from China to Vietnam, Mexico, India, and even back to the U.S. Once the global manufacturing system is compelled to reorganize around the U.S., the U.S. can achieve sustained fiscal extraction from foreign production capacity through "geopolitical tariff rents" in the medium to long term. Just as the dollar settlement system allows the U.S. to tax the global financial system, the tariff system is also becoming a new fiscal weapon to bind and exploit the manufacturing capabilities of peripheral countries.

The Side Effects of Tariffs Make Trump Cautious

Tariffs are a double-edged sword; while they limit imports to promote manufacturing repatriation, increase government tax revenue, and restrict competitor countries, they also come with potential side effects that could erupt at any moment. The first is the issue of imported inflation. High tariffs may temporarily raise the prices of imported goods, stimulating inflationary pressures, which poses a challenge to the independence of the Fed's monetary policy. Secondly, there could be fierce retaliation from competitor countries, and allied nations may protest or even retaliate against the U.S.'s unilateral tariff policies.

When tariffs threaten capital markets and the interest costs of the U.S. government, Trump becomes very anxious and immediately releases favorable tariff news to salvage market sentiment. Therefore, the destructive power of Trump's tariff policy is limited; however, whenever sudden tariff news emerges, the stock market and Bitcoin prices tend to pull back. Thus, viewing tariffs as a benign adjustment tool for Bitcoin is a reasonable perspective; the likelihood of tariffs independently creating a black swan event is very low under the premise of declining recession expectations in the U.S., as Trump will not allow the negative impacts of events to increase interest costs.

The Inevitable Decline of the Dollar's Status Leads to Greater Missions for Dollar Stablecoins

For Trump, to achieve the goal of manufacturing repatriation, it is acceptable to sacrifice the dollar's status in international currency reserves. One part of the reason for the hollowing out of U.S. manufacturing is the strength of the dollar. When the dollar remains strong, the world's demand for the dollar continues to rise, leading to a persistent financial surplus, which ultimately contributes to a continuous trade deficit, causing U.S. manufacturing to flee. Therefore, to ensure manufacturing repatriation, Trump frequently wields the weapon of tariffs, but this process accelerates the decline of the dollar's status.

It can be said that against the backdrop of rapidly evolving global financial dynamics, the relative weakening of traditional dollar control has become an undeniable fact. This change is not the result of a single event or policy misstep but rather the outcome of the long-term accumulation of multiple structural factors. Although on the surface, the dollar's dominant position in international finance and trade remains solid, a deeper examination from the perspectives of underlying financial infrastructure, capital expansion paths, and the effectiveness of monetary policy tools reveals that its global influence is facing systemic challenges.

First and foremost, the trend of global economic multipolarity is reshaping the relative necessity of the dollar. In the past globalization paradigm, the U.S., as the center of technology, institutions, and capital, naturally held discourse power, thus promoting the dollar to become the default anchor currency for global trade and financial activities. However, with the rapid development of other economies, especially the growth of financial self-organizing systems in Asia and the Middle East, this dollar-centric single settlement mechanism is gradually facing competitive alternatives. The traditional global liquidity advantage and settlement monopoly of the dollar are beginning to erode. The decline of dollar control does not equate to a collapse of its status, but its "uniqueness" and "necessity" are weakening.

The second important dimension comes from the trend of credit overextension exhibited by the U.S. in recent fiscal and monetary operations. Although past credit expansions and dollar overissuance are not unprecedented, their side effects have been significantly amplified in the context of higher synchronization in global markets during the digital age. Especially as the traditional financial order has not yet fully adapted to the new growth models dominated by the digital economy and AI, the inertia of U.S. financial governance tools is glaringly evident.

The dollar is no longer the only asset vehicle capable of providing global clearing and value storage; its role is gradually being diluted by a diverse array of contractual assets. The rapid evolution of the crypto system is also forcing sovereign currency systems to make strategic compromises. This oscillation between passive responses and active adjustments further exposes the limitations of the traditional dollar governance system. The passage of the GENIUS Act can be seen, to some extent, as a strategic response and institutional concession by the U.S. federal system to this new era of financial logic.

In summary, the relative decline of traditional dollar control is not a dramatic collapse but rather a gradual dissolution of a systemic and structural nature. This dissolution arises from both the multipolarity of global financial power and the lagging financial governance model of the U.S., as well as the crypto system's ability to reconstruct new financial tools, settlement paths, and currency consensus. During this transitional period, the credit logic and governance mechanisms that traditional dollars rely on need profound restructuring, and the GENIUS Act is a prelude to this restructuring attempt. The signals it releases are not merely about tightening or expanding regulation but represent a fundamental shift in the paradigm of monetary governance thinking.

The GENIUS Act is a Strategic Compromise of "Retreating to Advance"

The GENIUS Act reflects not a conventional regulatory action but rather a strategic "retreat to advance" proactive compromise. The essence of this compromise lies in the U.S.'s clear recognition of the paradigm shift in monetary governance triggered by crypto and its attempt to achieve a "leveraging" of future financial infrastructure through institutional design. The widespread distribution of dollar assets within the crypto system means that the U.S. can no longer block its development through mere regulatory measures; instead, it needs to ensure that dollar assets do not become marginalized in the next phase of on-chain currency competition through institutional "inclusive regulation."

The strategic significance of the GENIUS Act lies precisely in its shift away from "suppression" as the primary goal, instead constructing a predictable compliance framework that reintegrates the development of dollar stablecoins into the federal vision. If signals accepting the logic of crypto finance are not actively released, the U.S. may be forced to accept a non-dollar-dominated on-chain financial system. Once the dollar loses its status as an anchor asset in the on-chain world, its global clearing capacity and ability to export financial instruments will also diminish. Therefore, this is not an act of goodwill openness but a necessity driven by the defense of monetary sovereignty.

The GENIUS Act cannot simply be categorized as acceptance or tolerance of crypto; it is more akin to a "tactical withdrawal" of sovereign currency under a new paradigm, aimed at re-integrating resources and re-anchoring the on-chain currency power structure.

Crypto brings not only a new market or asset class but also a fundamental challenge to the logic of financial control and the way value is empowered. In this process, the U.S. has not chosen direct confrontation or forced regulation; instead, it has made a trade-off through the GENIUS Act—sacrificing direct control over the marginal aspects of crypto assets in exchange for legitimizing dollar stablecoin assets; ceding some authority in constructing on-chain order in exchange for the continuation of anchoring core assets.

The Role of Shadow Currency is Amplified by Crypto Tools

The introduction of the GENIUS Act appears to be an adjustment to the issuance order of stablecoins, but its deeper significance lies in the fact that the dollar's monetary structure is exploring a new expansion mechanism, extending the existing shadow currency logic through on-chain systems. The practice of the Restaking model in the DeFi ecosystem provides direct insights into this structural change. Restaking is not merely about asset reuse; it is a way to maximize the efficiency of the underlying collateral through protocol-level logic, achieving credit derivation and reuse of on-chain assets without altering the original source of credit. Similar ideas are being borrowed from the fiat currency world to construct a second-layer amplification mechanism for "on-chain dollars."

The shadow banking mechanism in the traditional financial system completes the monetary multiplier effect through off-balance-sheet credit expansion and non-traditional intermediaries. The on-chain stablecoin system, however, possesses stronger modularity and automation characteristics, making the formation path of the monetary multiplier not only shorter but also more transparent. If the collateral for stablecoins is U.S. Treasury bonds, it essentially uses national credit as the primary anchoring source, which is then amplified through on-chain protocol structures in multiple rounds. Each round of amplification can be designed as partially collateralized, cyclically staked, or cross-supported by multiple assets, and with sufficient on-chain liquidity and scenario demand, a complete new system of dollar credit expansion driven by on-chain logic can be formed.

This structure not only continues the layered characteristics of traditional shadow currencies but also introduces more operational on-chain clearing and tracking mechanisms. Especially as multi-chain deployment and cross-chain clearing and settlement frameworks gradually mature, the liquidity paths of on-chain stablecoins will no longer be limited to centralized exchanges or payment platforms but may penetrate deeper into more protocol layer stacks. In such a structure, each instance of restaking or asset packaging could become a new credit layer node. The GENIUS Act does not explicitly prohibit such operations, implying that regulation itself has implicitly acknowledged the sustainability of the on-chain shadow currency structure, only screening and reviewing the first-layer issuance.

More importantly, the monetary multiplier effect in the on-chain environment has a natural combinability. Once on-chain stablecoins have a broad protocol circulation base, their staking capacity will no longer be limited by the asset-liability structure of traditional finance but will achieve more granular asset circulation paths through smart contracts. This also means that the credit boundaries of on-chain dollars will be jointly determined by market behavior and protocol design, rather than being entirely dependent on regulatory approval. This change represents a fundamental shock to the fiat currency system, not in whether the scale of a certain type of stablecoin is controllable, but in whether dollar credit can still be managed in a closed-loop manner.

The underlying logic of the GENIUS Act has likely accepted the fact of this irreversible expansion of credit boundaries. While clarifying the on-balance-sheet regulatory framework, the U.S. has not set absolute restrictions on offshore issuance and repackaging paths; instead, by granting more flexibility to compliant institutions, it has established a multi-layered monetary structure of "parallel on-balance-sheet and off-balance-sheet, on-chain and off-chain coordination." In this way, U.S. regulatory agencies can maintain the credit foundation of the dollar in the on-chain system without intervening in specific operational paths, while controlling systemic risks through first-layer access mechanisms.

This also explains why, although the bill emphasizes that offshore issuers cannot enter the U.S. market, it does not deny their existence. In fact, offshore issuance, on-chain repackaging, and protocol cyclic amplification paths constitute the foundational prototype of a new generation of dollar expansion models, contributing to the influence of the dollar no less than the traditional offshore dollar system. From this perspective, the Restaking mechanism in DeFi is not only a tool for enhancing liquidity efficiency within crypto but has also become a reference blueprint for credit leverage design in real financial structures.

Continuous Market Expectations in the Rate-Cutting Cycle Prevent Post-Hoc Indicators from Triggering a "Bear Market"

After analyzing the impact of the aforementioned macro events and future trends, I will return to some data indicators of Bitcoin, attempting to find more evidence from the data that demonstrates Bitcoin's potential resilience. First, let me state my conclusion drawn from the data: Continuous market expectations during the rate-cutting cycle prevent post-hoc indicators from triggering a "bear market."

In observing Bitcoin's price movements, various indicators can be divided into two main categories based on their mechanisms and timeliness: prior indicators and post-hoc indicators. Furthermore, we can view market sentiment as an intermediate variable connecting these two types of indicators, serving as a catalyst for triggering supply-demand transitions and accelerating trend reversals.

Prior indicators typically exhibit slower change rhythms and higher trend prediction capabilities. These indicators do not imply that prices will immediately reverse but rather provide early warnings of potential structural opportunities, making them very suitable for "left-side positioning"—that is, entering positions at phase lows where prices have not yet clearly bottomed but have structural support for a rebound.

In contrast, post-hoc indicators rely on the price paths and trading behaviors that the market has already traversed to confirm whether a trend is genuinely established. The core value of these indicators lies in trend validation; they are not used for prediction but serve as references for "trend-following operations" once the market has established a certain trend.

From the past four-year cycles to the current new market trajectory, many prior and post-hoc indicators have lost their judgment significance, essentially because the main holders of Bitcoin have shifted from whales to institutions. Therefore, indicators such as miner shutdown prices, P/E ratios, NUPL, etc., which were previously used to judge bottoms and tops, have begun to fail.

In the trajectory of Bitcoin's new buying cycle, we need to remove the concept of bull-bear transitions from our minds and instead use the peaks and troughs of market sentiment as the basis for judging Bitcoin's phase status.

Market sentiment is reflected by Bitcoin's buyers; it is the micro-dynamic that lies between structural factors and price behavior, directly determining whether investors are willing to bet and collectively push price trends. Supply and demand can be extreme; if sentiment is not activated, prices may still remain stagnant; conversely, if sentiment rapidly heats up, even with limited structural support, there may be a sharp rebound or a sudden drop. Thus, market sentiment becomes an indispensable bridging variable connecting prior and post-hoc indicators, structural logic, and trading behavior. The reversal or extremity of sentiment can be analyzed by observing the relationship between long-term holders (LTH) and short-term holders (STH).

Long-Term Holders and Short-Term Holders' Profit and Loss Ratios

The conversion of LTH and STH profit and loss states often signals important market turning points. By observing changes in the long-term holders' profit and loss ratio (LTH-RPC), we can capture market bottom signals. When this indicator shows that long-term holders are beginning to experience widespread losses, it often means that the market is approaching a phase low.

The principle of the indicator is:

• When the profit ratio of long-term holders significantly declines and losses appear, it means that the realizable profit space has been greatly compressed.

• The persistence of loss states will suppress the willingness to sell; as the available sellable chips decrease, market selling pressure will gradually weaken.

• When selling momentum exhausts to a certain extent, the market will naturally form a price bottom.

Historical data supports this:

• At the bottoms of the bear markets in 2018 and 2022, the proportion of long-term holders' loss chips reached the range of 28%-30%.

• In the extreme market conditions of March 2020, this indicator also climbed to around 29%.

• During bull market cycles, when this ratio reaches 4%-7%, it typically corresponds to the low point of adjustment trends.

The market characteristics of Bitcoin at 75,000 show:

• The proportion of long-term holders' losses has risen from nearly zero to 2.8%, approaching the level in July 2024, where Bitcoin's price found support.

In bull market cycles, the rising proportion of long-term holders' losses from zero indicates that the bottom is near, serving as a prior indicator. When losses exceed 10%, it is referred to as a post-hoc indicator confirming a bear market. Subsequently, when losses reach around 30%, it again serves as a prior indicator of a bear market bottom.

When the vast majority of long-term holders are in a profit state, each price rebound will trigger profit-taking, creating sustained downward pressure. Whether at a bear market bottom or during a bull market correction, when long-term holders generally turn to a loss state, it often means that the market is about to bottom out. This is because, at this point, selling momentum has been fully released, and the unsustainable selling pressure will prompt prices to stabilize and rise.

Under the negative sentiment impact of the first tariff shock and recession black swan, Bitcoin began to decline in the proportion of long-term holders' losses without reaching the previous bull market correction ratio, indicating that in the current cycle, Bitcoin's pullback under extreme market conditions is limited.

STH-RPC is a prior indicator of market sentiment signals, serving as a right-side entry signal. When it turns from negative to positive, it proves that current demand far exceeds supply; when it turns from positive to negative, it indicates a local high.

Indicator principle:

• When new short-term participants in the market gradually shift from a loss state to a profit state, it usually means that overall confidence is recovering. When price declines lead to short-term participants experiencing losses, it indicates that sentiment may accelerate into pessimism. Such changes often accompany market trend reversals and are a key turning point signal for market sentiment.

Indicator trigger threshold:

• Once the average cost of short-term holders exceeds their holding cost, it indicates that this batch of funds is realizing a profit-loss reversal. Their profit-taking sentiment will bring stronger buying momentum, pushing prices continuously above previous trading ranges until the upward momentum is neutralized by selling pressure from long-term investors. Therefore, when the "short-term holding cost line" crosses above the "cost line," it often signifies that the market is warming up, and a trend reversal signal has appeared on the right side of the chart.

In the first half of this year, when Bitcoin's STH-RPC turned negative, market sentiment accelerated into pessimism, leading to the LTH-RPC loss rate rising below 4%, marking the bottom of market sentiment. The bear market signal of LTH-RPC exceeding 10% may not be triggered in the mid-short cycle of the GENIUS Act's passage, limited tariff impact, fading recession expectations, and approaching consistent easing.

The long-cycle slow bull structure of Bitcoin is not linear and will not rise every day; rather, it is composed of wave paths formed by multiple policy switches, geopolitical conflicts, technological changes, and market sentiment. However, as long as the "evolution of Bitcoin's asset attributes" path remains clear, it has the potential to become the most certain participant in this wave of global capital re-evaluation.

About Movemaker

Movemaker is the first official community organization authorized by the Aptos Foundation and jointly initiated by Ankaa and BlockBooster, focusing on promoting the construction and development of the Aptos ecosystem in the Chinese-speaking region. As the official representative of Aptos in the Chinese-speaking area, Movemaker is committed to building a diverse, open, and prosperous Aptos ecosystem by connecting developers, users, capital, and numerous ecological partners.

Disclaimer:

This article/blog is for reference only, representing the author's personal views and does not reflect the position of Movemaker. This article does not intend to provide: (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets, including stablecoins and NFTs, carries high risks, significant price volatility, and may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. For specific issues, please consult your legal, tax, or investment advisor. The information provided in this article (including market data and statistics, if any) is for general reference only. Reasonable care has been taken in compiling this data and charts, but no responsibility is accepted for any factual errors or omissions expressed therein.

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