Is the Bitcoin Bull Cycle Over? Analyzing Key Metrics and Trends

After reaching new all-time highs earlier this year, Bitcoin has entered a multi-month period of choppy price action, leading many to wonder if the bull cycle is over. In this article, we dive deep into key metrics and trends to understand if the market is just cooling off or if we’ve already seen the peak for this cycle.

Fundamentally Overvalued?

One of the most reliable tools for gauging Bitcoin’s market cycles is the MVRV Z-Score. This metric measures the difference between Bitcoin’s market cap and its realized cap, helping investors determine whether Bitcoin is over or undervalued. Recent data shows a sustained downward movement in the MVRV Z-Score, but historical analysis suggests that similar declines have been observed in previous bull cycles without signaling the end of the market.

The MVRV Momentum Indicator, which applies a moving average to the raw MVRV data, recently dipped below its moving average and turned red, potentially signaling the start of a bear cycle. However, historical data shows that similar dips have occurred without leading to a prolonged bear market.

Struggling Beneath Resistance?

The Short-Term Holder (STH) Realized Price, representing the average price at which recent market participants acquired their Bitcoin, is currently slightly above the market price. This indicates that many new investors are holding Bitcoin at a loss. However, previous bull cycles have seen Bitcoin’s price dip below the STH Realized Price without ending the market, presenting accumulation opportunities for investors.

Investor Capitulation?

The Spent Output Profit Ratio (SOPR) assesses whether Bitcoin holders are selling at a profit or a loss. Recent SOPR data shows only a few instances of selling at a loss, suggesting no widespread panic among Bitcoin holders. This lack of sustained losses and capitulation supports the view that the bull cycle is still intact.

Diminishing Returns?

Comparing the current cycle to previous ones, Bitcoin has already outperformed in terms of percentage gains. While this may suggest a cooling-off period, historical data shows that similar pauses have occurred before resuming the upward trajectory.

The Hash Ribbons Buy Signal

The Hash Ribbons Buy Signal, indicating bullish price action when the 30-day moving average of Bitcoin’s hash rate crosses above the 60-day moving average, has recently appeared for the first time since the halving event earlier this year. This suggests positive price action in the coming weeks and months.

In conclusion, while there are signs of weakness in the Bitcoin market, key metrics and trends indicate that the bull cycle is still intact. The lack of widespread capitulation and the recent Hash Ribbons Buy Signal provide confidence in the market’s future performance.