Is Bitcoin entering the "Banana Zone"? Understand the price surge and hidden risks behind the market frenzy at a glance.

In the crypto world, when you hear "Banana Zone," don't think it's some sort of joke. In fact, this term was proposed by macro investor Raoul Pal to describe the "banana-shaped" chart pattern when Bitcoin enters a phase of crazy pump. It is a market frenzy characterized by soaring prices, high emotions, and a coexistence of risks and opportunities. Now, will Bitcoin once again enter the Banana Zone in 2025? This article will take you on a journey to find out.

What is the "Banana Zone"? A period of crazy pump.

The so-called banana zone is a phase in the cryptocurrency market cycle characterized by a parabolic price surge, resembling the curve of a banana. This increase is typically accompanied by high volatility, market euphoria, and investor FOMO (fear of missing out). Historically, Bitcoin has gone through several banana zones:

2013: BTC surged from $100 to $1,000

2017: BTC soared from $5,000 to nearly $20,000

2024: From $20,000 all the way to $69,000, with some data even indicating that the March peak reached over $73,000.

The surge is not only driven by retail investors but also propelled by macroeconomic factors such as increased global liquidity and central bank easing policies.

Five characteristics of the banana zone: it's not just Bitcoin going crazy.

Market frenzy and FOMO effect When the media starts reporting frequently, retail investors flood in, and even taxi drivers are talking about Bitcoin, you may find yourself in the banana zone. This phenomenon often leads to excessive leverage and irrational investment.

Altcoin Relay Performance: Banana Singularity? After the initial pump of Bitcoin, funds often flow into riskier altcoins, triggering the "altcoin season" or the so-called "Banana Singularity." At this time, some small coins may experience a hundredfold surge.

Macroeconomics as a Key Driver According to Pal's "Everything Code" theory, the emergence of the banana zone is highly correlated with the global capital cycle, especially in the last quarter of U.S. presidential election years, where loose policies often drive up asset prices.

High volatility and corrections are the norm. Don't let the sweetness of the banana cloud your judgment! This upward phase is often accompanied by severe corrections of 30% to 34%. Even in a bullish trend, significant pullbacks are inevitable.

Indicators reveal entry timing Analysts observe multiple indicators to predict whether the banana zone is approaching, including stablecoin capital inflow, ETF inflow and outflow conditions, miner selling pressure, and the famous MVRV Z-Score.

Current Status of Bitcoin in 2025: Has the Banana Zone Been Activated?

As of May 2025, the price of Bitcoin has pulled back about 30% from its peak, and then rebounded to $104,000. This trend is reminiscent of the early stages of the banana zone in the past. However, according to technical analyst Rekt Capital, the market is currently still in the consolidation phase after the "first stage" of the banana zone.

Another analyst, Raoul Pal, believes that if BTC steadily breaks through the $70,000 to $72,000 range, it will officially initiate the second phase of the banana zone, at which point the performance of altcoins may become even more insane.

Key observation indicators: Which signals are worth paying attention to?

Reduced selling pressure from miners: After March 2024, miner income significantly decreased by about 55%, leading to reduced selling pressure, which is favorable for price increases.

Stablecoin capital inflow: By mid-2024, stablecoin reserves decreased by 10% to $21.96 billion, but if capital flows back in, it will boost overall market liquidity.

ETF outflow slows: If Bitcoin ETFs from Fidelity and Grayscale reduce redemptions, market pressure will further decrease.

MVRV Z-Score: This indicator is used to determine whether the market is overheated. A score of 4 to 7 indicates entry into the banana zone, and the current score is approximately 2.85, indicating that the market is still in its early stages.

Why is it called "banana"? It's actually a bit casual yet true.

The term "banana zone" is not a rigorous academic term but rather a figurative expression. Some believe it is because the price chart resembles a banana shape, while others think Bitcoin is like a banana: sweet when ripe but rotten when overripe, symbolizing a potential crash at any moment.

Investment advice and risks: How to avoid "slipping" in the banana zone?

Opportunity: The banana zone may bring high returns, especially for mainstream coins like BTC, ETH, and SOL. Raoul Pal suggests focusing on leading coins and avoiding overexposure to high-risk small coins.

Risk: Don't be blinded by market euphoria. An extremely greedy index (Fear & Greed Index over 90), large holders starting to sell off, and media hype are all warning signs that the market is about to reverse.

Strategy: Regularly observe indicators such as MVRV Z-Score, whale fund flow, and Bitcoin market share. Set profit-taking points to avoid becoming the last one to take over.

The Banana Zone is the most exciting yet dangerous phase in the Bitcoin market. It symbolizes the potential for a pump and represents the risk of a bubble. The market in 2025 seems to be gearing up, but has it truly entered the Banana Zone? Multiple market signals still need to be observed. On this banana peel intertwined with speculation and investment, remember: look clearly at the direction before slipping.

Is Bitcoin entering the "Banana Zone"? Understand the price surge and hidden risks behind market frenzy at a glance. First appeared in Chain News ABMedia.