Understanding Bitcoin’s market cycles is crucial for investors seeking to make informed decisions. Many are wondering where we currently stand in this Bitcoin cycle and what lies ahead. By analyzing historical trends and key on-chain metrics, we can gain insight into Bitcoin’s potential trajectory for the remainder of our current bull cycle.
Growth Since the Cycle Low
One of the most reliable ways to assess Bitcoin’s current position is by comparing it to previous market cycles. When we look at Bitcoin’s growth since the cycle low, a clear pattern emerges. We see that Bitcoin is performing in line with the 2017 cycle. In fact, it is slightly outperforming that cycle, which is impressive given that many analysts expected diminishing returns and reduced volatility over time.
Figure 1: BTC is still outpacing the 2017 cycle.
Despite recent price stagnation after breaching six-figure territory; historical data suggests this is a normal phase in the cycle. Bitcoin’s current price action aligns with the patterns observed in previous bull markets, reinforcing the expectation that further upside movement is still on the horizon.
Miner Earnings
The Puell Multiple, which measures Bitcoin miner earnings in today’s USD terms against a previous yearly average, is another crucial metric to consider. Currently, the Puell Multiple is displaying behavior that aligns with past cycles. Historically, we see a significant run-up before the halving, followed by a dip, and then a period of consolidation lasting 6 to 12 months. After retesting the critical level of one, Bitcoin often enters the euphoric phase of its bull cycle.
Figure 2: Puell Multiple is currently experiencing a similar pattern to previous cycles.
MVRV Z-Score
Another helpful indicator, the MVRV Z-Score, looks at the relationship between the Realized Price, or average accumulation price of all BTC, and the underlying price. In past cycles, Bitcoin has moved from periods of discounted valuation to strong rallies, then brief retracements, before experiencing sustained parabolic growth.
Figure 3: MVRV Z-Score outlines the remaining upside potential for this cycle.
If history repeats itself, Bitcoin may soon enter a renewed phase of price discovery, with increasing momentum over the next 6 to 12 months as we’re once again showing similarities in data and price action to March/April 2017.
Macroeconomic Influence
Bitcoin’s market cycles are not isolated from macroeconomic forces, and the U.S. Dollar Index (DXY) has historically played a role in fueling bull cycles. In 2016, a rising DXY signaled a strong Dollar before a reversal occurred, leading to a prolonged decline. This drop in the DXY coincided with Bitcoin’s major rally from $1,000 to $20,000, a 20x increase. While a 20x gain from today’s prices is unlikely, a weakening DXY could still provide tailwinds for Bitcoin’s next upward leg.
Figure 4: Bitcoin has historically been inversely correlated to USD strength.
Interestingly, in early 2017, this shift in the DXY began around March-April, almost exactly where we find ourselves today in terms of cycle positioning. If the DXY follows a similar path, which seems probable given the same US President has just taken office as we had in 2017, Bitcoin may experience significant upside movement in the coming months.
Historical Comparisons
Analyzing previous market cycles macro trends also gives us insight into potential timeframes for Bitcoin’s peak in this cycle. Here, we can zoom out to compare the timescales of the previous two cycles to our current BTC cycle:
- In the 2017 cycle, it took 40 months to reclaim the previous all-time high.
- In the 2020 cycle, it took 36 months to do the same.
- In the current cycle, we once again saw a recovery in 36 months.
Furthermore, from cycle lows to all-time highs:
- The 2017 bull cycle lasted 35 months.
- The 2021 bull cycle also took 35 months.
- We are currently 27 months into our current bull cycle, 35 months would be October 2025.
Figure 5: BTC macro trend cycles compared.
BTC has typically peaked in Q4, with October historically being a strong month for Bitcoin. Although with November following as the best-performing month for BTC, it’s possible that the cycle may continue to push higher and closer to 2026 before reaching a final peak.
Conclusion
Regardless of short-term volatility, Bitcoin’s long-term trajectory remains bullish, and this cycle could be far from over. On-chain metrics, historical comparisons, and macroeconomic indicators all point toward a continuation of bullish price action over the next 6 to 12 months.
Bitcoin has a history of surprising investors, whether by outperforming expectations in a supercycle or encountering an unexpected black swan event that disrupts its momentum. While past cycles provide a useful roadmap, it’s always essential to focus on real-time data rather than rigid predictions.
For a more in-depth look into this topic, check out a recent YouTube video here:
Where Are We In This Bitcoin Cycle?
Matt
Lead Analyst Bitcoin Magazine Pro.