Bitcoin’s current market cycle is proving to be “dramatically” weaker than its previous three cycles, according to Alex Thorn, head of research at Galaxy. Since the April 2024 halving, Bitcoin’s price volatility has significantly diminished, with the latest all-time high of over $125,000 representing only a 97% increase from the halving price of around $63,000. In contrast, previous cycles experienced gains of 9,294%, 2,950%, and 761%, respectively. The 30-day Bitcoin Volatility Index has also dropped to a mere 1.75%, indicating a fundamental shift in market dynamics.
This subdued performance raises questions about the influence of traditional market factors on Bitcoin’s price, moving away from the historical four-year cycle theory. Critics argue that the early all-time high in March 2024, driven by the approval of spot Bitcoin ETFs, skews the current cycle’s analysis. Additionally, drawdowns have become less severe, with a recent decline of just over 50% compared to historical drops of 80% to 90%.
For market professionals, the key takeaway is the evolving nature of Bitcoin’s price behavior, suggesting a potential recalibration of investment strategies as traditional volatility metrics may no longer apply.
Source: cointelegraph.com