Bitcoin’s price cycles have long been a source of intrigue for investors and analysts alike. We can gain insights into potential price movements by comparing current trends to previous cycles, especially with Bitcoin seemingly coming to an end of its consolidation period, many wonder if the next leg up is around the corner.

Comparing Bitcoin Cycles

To begin, it’s crucial to look at how Bitcoin has performed since hitting its recent cycle low. As we examine the data, a clear picture begins to form: Bitcoin’s current price action (black line) is showing patterns similar to previous bull cycles. Although it has been a choppy consolidation period, where the price has been relatively stagnant, there are key similarities when we compare this cycle to those in 2015-2018 (purple line) and 2018-2022 (blue line).

Where we are today, in terms of percentage gains, is comparable to both the 2018 and 2015 cycles. However, this comparison only scratches the surface. Price action alone doesn’t tell the full story, so we need to dive deeper into investor behavior and other metrics that shape the Bitcoin market.

Investor Behavior

One key metric that gives us insight into investor behavior is the MVRV Z-Score. This ratio compares Bitcoin’s current market price to its “realized price” (or cost basis), which represents the average price at which all Bitcoin on the network was accumulated. The Z-Score then just standardizes the raw MVRV data for BTC volatility to exclude extreme outliers.

Analyzing metrics such as this one, as opposed to purely focusing on price actions, will allow us to see patterns and similarities in our current cycle to previous ones, not just in dollar movements but also in investor habits and sentiment.

Correlating Movements

To better understand how the current cycle aligns with previous ones, we turn to the data from Bitcoin Magazine Pro, which offers in-depth insights through its API. Excluding our Genesis cycle, as there is little correlation and isolating the price and MVRV data from Bitcoin’s lowest closing prices to its highest points in our current and previous three cycles, we can see clear correlations.

2011 to 2013 Cycle: This cycle, characterized by its double peak, shows a strong 87% correlation with the current price action. The MVRV ratio also shows a high 82% correlation, meaning that not only is Bitcoin’s price behaving similarly, but so is investor behavior in terms of buying and selling.

2015 to 2017 Cycle: This cycle is actually the closest in terms of price action, boasting an 89% correlation with our current cycle. However, the MVRV ratio is slightly lower, suggesting that while prices are following similar paths, investor behavior might be slightly different.

2018 to 2021 Cycle: This most recent cycle, while positive, has the lowest correlation to current trends, indicating that the market may not be following the same patterns it did just a few years ago.

Are We in for Another Double Peak?

The strong correlation with the 2011-2013 cycle is particularly noteworthy. During that period, Bitcoin experienced a double peak, where the price surged to new all-time highs twice before entering a prolonged bear market. If Bitcoin follows this pattern, we could be on the verge of significant price movements in the coming weeks. After overlaying the price action fractal from this period over our current cycle and standardizing the returns, the similarities are instantly noticeable.

In both cases, Bitcoin had a rapid run-up to a new high, followed by a long, choppy period of consolidation. If history repeats itself, we could see a massive price rally soon, potentially to around $140,000 before the end of the year when accounting for diminishing returns.

Patterns In Investor Behavior

Another valuable metric to examine is the Value Days Destroyed (VDD). This metric weights BTC movements by the amount being moved and the time since it was last transferred and multiplies this value by the price to offer insights into long-term investors’ behavior, specifically profit-taking.

In the current cycle, VDD has shown an initial spike similar to the red spikes we saw during the 2013 double peak. This run-up as BTC ran to a new all-time high earlier this year before a sustained consolidation period could see us reaching new highs soon again if this double peak cycle pattern continues.

A More Realistic Scenario

As Bitcoin has grown and matured as an asset, we’ve seen extended cycles and diminishing returns in our two most recent cycles compared to our initial two. Therefore, it’s probably more likely that BTC follows the cycle in which we’re seeing the strongest correlation in price action.

Figure 6: Overlaying a fractal of the 2017 cycle on our current price action.

If Bitcoin follows the 2015-2017 pattern, we could still see new all-time highs before the end of 2024, but the rally would likely be slower and more sustainable. This scenario predicts a price target of around $90,000 to $100,000 by early 2025. After that, we could see continuous growth throughout the year, with a potential market peak in late 2025, although a peak of $1.2 million if we follow this pattern exactly may be optimistic!

Conclusion

Historical data suggests we’re approaching a critical turning point. Whether we follow the explosive double-peak cycle from 2011-2013 or the slower but steady rise of 2015-2017, the outlook for Bitcoin remains bullish. Monitoring key metrics like the MVRV ratio and Value Days Destroyed will provide further clues as to where the market is headed, and comparing correlations with our previous cycles will give us better insights into what may be coming.

With Bitcoin poised for a breakout, whether in the next few weeks or in 2025, if BTC even remotely follows the patterns of any of our previous cycles, investors should prepare for significant price action and potential new all-time highs sooner rather than later.

For a more in-depth look into this topic, check out a recent YouTube video here: Comparing Bitcoin Bull Runs: Which Cycle Are We Following

Bitcoin has been steadily climbing since crossing the $60,000 mark and is currently hovering closer to the $70,000 level, a price it hasn’t reached in months. With the market sentiment heating up, investors are wondering whether Bitcoin has the strength to reach new all-time highs or if it will struggle to break past key resistance levels.

A Healthy Sentiment

The Fear and Greed Index is a useful tool for understanding market sentiment and how traders view the trajectory of Bitcoin. Currently, the index is at a “Greed” level of around 70, which is historically seen as a positive sign but still a fair distance from the extreme greed levels that could indicate a potential market top. This index measures emotions in the market, with lower levels indicating fear and higher levels suggesting greed. Typically, when the index surpasses the 90+ range, the market becomes overly bullish, raising concerns of overextension.

It’s important to note that last year, when the Fear and Greed Index reached similar levels, Bitcoin was trading at around $34,000. From there, it more than doubled to $73,000 over the following months.

Key Support

The Short-Term Holder Realized Price measures the average price new Bitcoin investors have paid for their bitcoin. It’s crucial because it often acts as a strong support level during bull markets and as resistance during bear markets. Currently, this price sits around $62,000, and Bitcoin has managed to stay above it. This is a promising sign, as it shows that newer market participants are in profit, and Bitcoin is holding above a crucial support zone. Historically, breaking below this level has led to market weakness, so maintaining this support is key to any continued rally.

We’ve seen this dynamic in past cycles, especially during the 2016-2017 bull market, where Bitcoin retraced to this level several times before continuing its climb. If this trend holds, Bitcoin’s recent breakthrough could provide a foundation for further gains.

Stabilizing Market

One area that traders often watch is Funding Rates, which indicate the cost of holding long or short positions in Bitcoin futures. Over the past few months, funding rates have been volatile, swinging between overly optimistic long positions and overly bearish short positions. Thankfully, the market has now stabilized, with funding rates sitting at neutral levels. This is a healthy sign as it suggests traders aren’t overly leveraged in either direction.

In neutral territory, there’s less risk of a liquidation cascade, a common phenomenon when over-leveraged positions get wiped out, causing sharp market drops. As long as the funding rates remain stable, Bitcoin could have the breathing room it needs to continue rising without major volatility.

A Tough Path to $70,000 and Beyond

While the market sentiment and technicals suggest that Bitcoin is in a healthy place, there are still significant levels of resistance above. First, the current resistance trend line is one that Bitcoin has struggled to break. This downtrend line has been tested several times, but each time, Bitcoin has retraced after hitting it.

Beyond this, Bitcoin faces several additional barriers, such as $70,000. This level has acted as resistance in the past and represents a psychological level that traders will likely be watching closely. And above that the all-time high between $73,000 and $74,000. Breaking this would be a major bullish signal, but it could take several attempts before Bitcoin clears this level.

One positive technical element is the recent reclaim of the 200 daily moving average. A key level for investors to watch that had acted as resistance for BTC over the previous few months.

The Macro Environment: Institutional and ETF Inflows

Beyond technical indicators, the macro environment is increasingly favorable for Bitcoin. Institutional money continues to flow into Bitcoin Exchange-Traded Funds (ETFs). In the past few days, over $1 billion has flowed into Bitcoin ETFs, reflecting growing confidence in the asset. Over the past few weeks, we’ve seen hundreds of millions more in ETF inflows, signaling that smart money, particularly institutional investors, is bullish on Bitcoin’s future.

This is significant because institutional money tends to take a long-term view, providing a more stable base of support than retail speculation. Moreover, as equities and even gold have been gaining ground in recent months, Bitcoin appears to be lagging slightly behind. This could set the stage for Bitcoin to play catch-up, particularly if investors rotate from traditional assets into the more risk-on realm of Bitcoin.

Conclusion

Bitcoin’s price action, funding rates, and sentiment all suggest that the market is in a healthier place than it has been in months. Institutional inflows into ETFs and improving macro conditions add further bullish tailwinds. However, significant resistance lies ahead, and any rally will likely face challenges before Bitcoin can truly break out to new highs.

For a more in-depth look into this topic, check out a recent YouTube video here:

Can Bitcoin Now Make A New ATH

Bitcoin miners have always been a reliable indicator of the overall sentiment within the market. By tracking their earnings and actions, we can get a sense of where the price of BTC might head next. In this article, we’ll explore the latest trends in Bitcoin mining, how miners are reacting to current market conditions, and what we can learn from key indicators to gauge how Bitcoin miners are positioning themselves for the coming weeks and months.

State of Miner Earnings

One of the best ways to assess Bitcoin miner sentiment is to examine their earnings in relation to historical data. This can be done using The Puell Multiple, which measures current miner earnings against the yearly average from the previous year.

As of the latest data, the Puell Multiple is hovering around 0.8, meaning miners are earning 80% of what they were making on average over the past year. This is a marked improvement from a few weeks ago when the multiple was as low as 0.53, indicating miners were earning just over half of their previous year’s average.

This significant drop earlier in the year likely put financial pressure on many miners. However, despite these challenges, the fact that the Puell Multiple is recovering suggests that the outlook for miners might be improving.

Hashrate and Network Growth

Even though earnings are down, there are no signs of miners leaving the network. In fact, Bitcoin’s hashrate, which is the total computational power used to secure the network, has been steadily increasing. This surge in hashrate indicates that more miners are entering the network or existing miners are upgrading their equipment to compete for block rewards.

However, looking at the Hash Ribbons Indicator, which tracks the 30-day (blue line) and 60-day (purple line) moving averages of Bitcoin’s hashrate, these two averages have been getting closer to crossing, which could potentially indicate a bearish outlook for the short term. When the 60-day average rises above the 30-day average, it historically points to miner capitulation, a time when miners, under financial stress, shut off their equipment.

Until we see a bearish crossover, there’s no immediate sign of bearishness. One positive is that every time this happens, it has been followed by a period of accumulation, which typically precedes a rise in Bitcoin prices. Investors often consider these capitulation periods great opportunities to buy BTC at lower prices.

How Much Are Miners Making?

While we’ve discussed miner earnings in relation to Bitcoin’s price, another important factor is the Hashprice, the amount of BTC or USD miners can earn for each terahash (TH/s) of computational power they contribute to the network.

Currently, miners earn approximately 0.73 BTC per terahash, or about $45,000 in USD terms. This amount has been steadily decreasing in the months following the latest Bitcoin halving event, where miners’ block rewards were cut in half, reducing their profitability. Despite these challenges, miners are still increasing their hashrate, which suggests they’re betting on future BTC price appreciation to compensate for their lower earnings.

One of the most interesting metrics to watch is the Hashprice Volatility, which tracks how stable or volatile miner earnings are over time. Historically, periods of low hashprice volatility have preceded significant price movements for Bitcoin. As of the latest data, hashprice volatility has begun to drop again, suggesting we could be nearing a period of substantial price movement for Bitcoin.

Conclusion

Bitcoin miner earnings are down compared to a historical average post-halving, but they’re recovering from a recent significant low. Bitcoin’s hashrate is still climbing; meaning miners are pouring more computational power into the network despite lower profitability. The hashprice continues to drop, but miners remain optimistic, likely due to expected future price appreciation. Hashprice volatility is falling, historically indicating that a large move in BTC’s price could be imminent.

Bitcoin miners seem to be bullish about the long-term potential of BTC, despite current challenges. If current metric trends hold, we could be on the verge of a significant price movement, with most indications pointing towards a positive outlook.

For a more in-depth look into this topic, check out a recent YouTube video here:

What Do Bitcoin Miners Expect Next?