All previous Bitcoin priced bloom markets are explosive, explosive upside down patterns followed by sharp drawdowns, each cycle offering a lower percentage of profit than last time. Known as a declining return, this phenomenon has become one of the most enduring stories in Bitcoin. The current question is whether this cycle follows the same trajectory or whether Bitcoin’s maturation as an asset class may bend the pattern.
Decreasing Bitcoin Prices and Returns
So far, this cycle has witnessed BTC growth of around 630% from its latest history high due to its low cycle. This is comparable to more than 2,000% in the previous bull market. Bitcoin should reach around $327,000, depending on the size of the final cycle.
Figure 1: Cycle-over-cycle returns show a reduction in multiples, but still show strong absolute benefits. View live charts
Evolving Bitcoin Price Dynamics
One of the less explosive, reversed profits can be seen in the Supply Adjusted Coin Day (CDD) metrics. This tracks the speed of old coins moving in the chain. In past cycles such as the bull market in 2021, long-term holders tended to sell after Bitcoin was already valued at about four times the local lows. However, this cycle has earned a similar level of profit after just double the movement. Recently, CDD spikes have been caused by even less price increases of 30-50%. This reflects the foundation of mature investors. Long-term holders are willing to realize profits faster, thus weakening parabolic progress and smoothing out the market structure.
Figure 2: Supply adjusted CDDs highlight how to make profits at low multiples of each cycle. View live charts
Another factor is Bitcoin volatility. Bitcoin quarterly volatility has been steadily declining. This reduces the odds of extreme blow-off tops, but also supports a healthier long-term investment profile. Lower volatility means greater capital inflows required to move prices, but it makes Bitcoin more attractive to institutions seeking risk-adjusted exposure.
Figure 3: Bitcoin volatility is declining, but risk-adjusted returns remain stronger than stocks. View live charts
This is shown in Bitcoin Sharp ratio. Here, Bitcoin is currently scoring more than twice the industrial average for the Dow Jones. In other words, Bitcoin offers better returns compared to risk despite the stable market.
Figure 4: Bitcoin’s Sharp ratio is twice as high as the Dow Jones. View live charts
Bitcoin price and golden ratio
From a technical standpoint, the Golden Ratio multiplier provides a framework for predicting reduced returns. Each cycle top is aligned with a gradually lower Fibonacci multiple of the 350-day moving average. In 2013, Price reached the 21x band. At the top of 2017, they reached the 5x band and in 2021 they reached the 3x band. This cycle of Bitcoin has tagged double and 1.6 times bands so far, but pushback to double levels is still possible.
Figure 5: Applying the Golden Ratio multiplier to show the reduced BTC returns. View live charts
Based on current trajectories, moving forward these 1.6x and double levels suggests a goal of between $175,000 and $220,000 by the end of the year. Of course, you can see that 350DMA moves upwards more exponentially when closing these top targets. The point is that these levels are constantly changing and always point to a higher target as the bull cycle progresses.
Figure 6: Golden Ration Multiplier Framework suggests a rise from $175,000 to $220,000.
Bitcoin prices in the new era
Reducing returns does not reduce the appeal of Bitcoin. If anything, they strengthen it for the institution. Less intense drawdowns, potentially extended cycles, and increased risk-adjusted performance, helping Bitcoin become a more investable asset. However, even if Bitcoin matures, its benefits remain extraordinary compared to traditional markets. Although 2,000% or more cycle days may be behind us, the era of Bitcoin as mainstream has only just begun in institutionally held assets and will still offer unparalleled returns for the next few years.
For deeper data, charts, and expert insights into Bitcoin price trends, visit bitcoinmagazinepro.com.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making an investment decision.
Will this post deny that Bitcoin prices return this cycle? It first appeared in Bitcoin Magazine and is written by Matt Crosby.
