Bitcoin's Cycle Tops Shrink 80% as Market Matures

Bitcoin has undergone a significant transformation in its price behavior over the past eight years, reflecting the maturation of the market. Initially, Bitcoin's cycle tops were characterized by explosive rallies, reaching as high as 15 times the 2-Year Simple Moving Average (2Y SMA). These wild swings were driven by speculative growth and a thin market, with early adopters fueling the surges.

However, as Bitcoin gained global recognition and institutional interest, its price behavior began to stabilize. By 2017, the market had evolved, and Bitcoin's cycle tops occurred around 10 times the 2Y SMA, indicating high volatility amidst growing maturity. In 2021, institutional money flooded in, but the cycle's peak dropped to 5 times the 2Y SMA, then reversing around 2.65 times. This marked a structural shift, as Bitcoin transitioned from being merely a trade to becoming a macro asset.

In the most recent cycle, Bitcoin has failed to surpass the 2.65 times multiple, showing a narrowing of gains and indicating a more mature asset. Currently, the 2Y SMA times 2.65 level reflects lower volatility, deeper liquidity, and a mature user base. That level now sits around $159,000. If Bitcoin makes a major upswing, $159k will act as the next key resistance.

Despite the diminishing cycle tops, there is still room for growth. Bitcoin's Market Value to Realized Value (MVRV) is currently around 2.4, signaling that the market is still below euphoria territory. Historically, Bitcoin tops have emerged around 3.5 to 4.0. Thus, at current levels, there is still more room for growth before the cycle tops. Additionally, the Net Unrealized Profit/Loss (NUPL) remains in the belief/denial zone, not yet in greed or euphoria. With significant maturity in market behavior, BTC holders are currently unlikely to pursue extreme profit-taking as they expect higher prices for the current cycle.

Therefore, although future cycles can no longer experience a 15 times surge, there is still more room for growth. Bitcoin is more stable, less volatile, and reliable as an investment. In the prevailing market, BTC still has more room for growth. If the momentum of the cycle holds and BTC surpasses $110k, we could see a surge to $159k levels. In the short term, however, this is unlikely, but since the market is yet to reach a top, this level could be where markets cool down for the current cycle.