Bitcoin (BTC) is currently at a critical juncture in its current cycle, showing potential signs of divergence from previous halving patterns. Unlike previous cycles, which were marked by robust rallies following halvings, this cycle has been fraught with uncertainty. Market movements are no longer solely dictated by Bitcoin’s intrinsic characteristics but are instead influenced by larger macroeconomic shifts and burgeoning institutional involvement.
Moreover, political factors like former President Trump’s pro-crypto stance and the adoption of Bitcoin at the state level have introduced further variables into the equation. Given these new dynamics, one can’t help but wonder if Bitcoin’s cycle has already reached its zenith, or if there’s still potential for another rally that could push its value beyond $100,000.
The trajectory of the current Bitcoin cycle seems to be diverging from past cycles. Unlike the post-halving rallies of 2012-2016 and 2016-2020, the current cycle started its rally between October and December 2024, followed by a period of consolidation in January 2025 and a subsequent correction by the end of February.
This deviation from past patterns suggests that Bitcoin’s traditional cycle dynamics are being reshaped by macroeconomic influences, market structure changes, and the increasing participation of institutional investors. Instead of being driven by retail speculation, Bitcoin is now being treated as a more mature asset class.
A closer look at Bitcoin’s cycle reveals a diminishing momentum in its surges as the cycles progress. The explosive rallies of 2012-2016 and 2016-2020 were much stronger than those seen in the 2020-2024 cycle and the current one. While this is a natural consequence of Bitcoin’s growing market capitalization, it also points to the impactful role of institutional investors, banks, and even governments. This could potentially lead to more stability and structured market behavior in the long term.
Despite these shifts, there is still potential for another upward move if Bitcoin follows the precedent set by previous cycles, which saw periods of consolidation and correction before resuming their uptrend. However, given the market’s structural changes, the current cycle may be characterized by less volatility but a more sustainable and prolonged price appreciation.
A crucial indicator of the shift in cycle dynamics is the Long-Term Holder (LTH) MVRV ratio, which shows a pattern of diminishing returns across cycles. In the 2016-2020 cycle, the LTH MVRV peaked at 35.8, reflecting a high level of unrealized profit amongst long-term holders. In the current cycle, this peak has significantly dropped to 4.35, indicating that long-term holders are not reaping as much liquid profit as in previous cycles.
This decrease suggests that Bitcoin’s upside potential is compressing over time. As the market cap expands, more capital inflows are needed to drive similar percentage gains seen in early cycles. While this indicates that Bitcoin’s long-term growth is stabilizing, it does not necessarily mean that the cycle has peaked.
Despite these differences, experts remain optimistic about Bitcoin’s long-term prospects, particularly with increasing adoption at the state level. The Coin Bureau’s founder, Nic Puckrin, believes that Bitcoin’s short-term trajectory remains tied to macroeconomic conditions. He points out that unrealistic expectations from the Bitcoin crypto reserve were a catalyst behind the current price corrections.
Therefore, despite recent corrections, BTC may not have peaked yet. New factors such as institutional adoption and geopolitical tensions make historical comparisons less reliable. With Bitcoin now part of the global financial system, its price is reacting to more than just halving cycles. The path forward remains unclear, but the cycle isn’t necessarily over.
