Bitcoin’s growth has slowed in recent months, but recent trends in market behavior are drawing comparisons to its previous cycles, particularly the 2015-2018 bull run. As Bitcoin matures, signs point to the possibility of another major price surge. A closer look at key market indicators suggests that Bitcoin may be entering a new growth phase, similar to past cycles.
One of the most notable trends is the slower rate of price appreciation with each cycle. As Bitcoin has transformed into a multi-trillion-dollar asset, the capital required to fuel further growth has naturally risen. This has led to a deceleration in the rate at which Bitcoin’s price increases. However, the current market cycle is showing a marked difference from earlier, more volatile periods. The recent pullbacks in Bitcoin’s price have been relatively shallow, with drops between 10% and 23%. This is a significant sign of the growing stability of the asset, indicating that demand remains strong, even as its price experiences periodic dips.
Looking at the market structure, one key signal of Bitcoin’s maturation is the increase in its Realized Cap. Realized Cap is the total value of Bitcoin based on the price at which it last moved. In the 2011-2015 cycle, Bitcoin’s Realized Cap surged by an impressive 122 times, driven by its early adoption. Since then, growth has been slower, but it’s also a sign of Bitcoin becoming a more capital-intensive market. For example, in the current cycle, Bitcoin’s Realized Cap has increased by about 2.1x so far, a sharp decline from the 5.7x increase in the previous cycle. This type of pattern is also visible in the 2015-2018 period. Despite the slower growth, a further surge in Realized Cap could trigger a period of accelerated price gains, a characteristic feature of Bitcoin’s bull cycles.
Investor behavior also plays a key role in determining the market’s trajectory. Bitcoin’s long-term holder supply ratio has been tracked to gauge market sentiment—whether it’s in an accumulation or distribution phase. A rising ratio signals that more long-term holders are “HODLing” their assets, suggesting strong confidence in Bitcoin’s future value. On the other hand, when the ratio declines, it signals increased selling. In this cycle, Bitcoin has seen two notable waves of distribution. However, each time, these distribution phases have been followed by rallies in Bitcoin’s price. This suggests that reduced sell-side pressure creates room for bullish momentum to build.
A deeper look at the Bitcoin market reveals that Bitcoin is currently entering a stage that resembles the euphoric phases of past cycles. One major change that has occurred since mid-2024 is the shift in Bitcoin’s exchange balances. Bitcoin held on exchanges has dropped from 3.1 million BTC to 2.7 million BTC since July 2024. Most of this decline is attributed to coins being moved into institutional custodial wallets, particularly after the approval of Bitcoin Spot ETFs in January 2024. This institutional influx could further drive Bitcoin’s demand, as it signals confidence in its long-term value.
In conclusion, while Bitcoin’s price may have slowed in its recent growth, the current cycle’s underlying market dynamics suggest that another bull run may be on the horizon. Key indicators such as Realized Cap growth, the decreasing sell-side pressure, and institutional interest all point to potential future price rallies. As Bitcoin matures, it continues to show signs of entering a new euphoria phase, which could lead to another period of rapid price appreciation.
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