The recent pullback in Bitcoin’s price from its new all-time high of $108,353 to approximately $96,000 has sparked considerable debate regarding the potential zenith of the current bull cycle. Rafael Schultze-Kraft, co-founder of the on-chain analytics provider Glassnode, addressed this growing uncertainty by releasing insights based on 18 on-chain metrics and models.
Has Bitcoin Reached Its Cycle Top?
MVRV Ratio
The MVRV ratio, a traditional measure of unrealized profitability, compares Bitcoin’s market value to its realized value. Historically, readings above 7 have indicated overheated market conditions. Currently, the MVRV ratio is around 3, suggesting that the market has not yet reached the levels historically associated with macro tops.
MVRV Pricing Bands
Derived from the number of days MVRV has spent at extreme levels, these bands indicate potential market tops. The top band, at 3.2, has been exceeded for only about 6% of trading days historically. With Bitcoin priced around $98,000, the market is far from entering a historically significant top zone.
Long-Term Holder Profitability
The Long-Term Holder (LTH) Net Unrealized Profit/Loss (NUPL) metric currently stands at 0.75, which Schultze-Kraft identifies as the “euphoria zone.” However, historical peaks have often seen readings above 0.9, implying that the current cycle has not yet reached past extremes.
Yearly Realized Profit/Loss Ratio
This metric measures realized profits against losses over the past year. Previous cycle tops have seen values above 700%, while the current figure is around 580%, indicating room for growth before reaching historic top indicators.
Analytical Insights and Market Metrics
Market Cap to Thermocap Ratio
This early on-chain metric compares Bitcoin’s total market capitalization to the cumulative mining cost (Thermocap). Although current levels are below historical thermocap multiples, the market remains distant from previous extremes associated with overheated conditions.
Thermocap Multiples (32-64x)
Historically, Bitcoin has peaked at approximately 32-64 times the Thermocap. Currently, we are at the lower end of this range, suggesting the possibility of significant upside if historical patterns hold.
The Investor Tool (2-Year SMA x5)
The Investor Tool uses a 2-year Simple Moving Average (SMA) of price, multiplied by 5, to signal potential top zones. At present, this level is $230,000, indicating that Bitcoin’s current price is not near a definitive top signal.
Bitcoin Price Temperature (BPT6)
This model uses deviations from a 4-year moving average to identify price extremes. The current band sits at $151,000, with Bitcoin at $98,000, indicating the market hasn’t reached previous peak levels.
The True Market Mean & AVIV
The True Market Mean offers an alternative cost basis model, with its MVRV-equivalent, AVIV, measuring market deviations. Tops historically occurred at more than 3 standard deviations, while today’s reading is 1.7, suggesting room for growth.
Low/Mid/Top Cap Models (Delta Cap Derivatives)
These models, based on the Delta Cap metric, showed diminished values during the 2021 cycle. The current mid cap sits at about $4 trillion, indicating potential growth before reaching historical tops.
Value Days Destroyed Multiple (VDDM)
This metric assesses the spending behavior of long-held coins. Extreme values historically indicated heavy market activity, with current levels at 2.2, not yet signaling a market top.
The Mayer Multiple
The Mayer Multiple compares the price to the 200-day SMA. Overbought conditions have historically aligned with values above 2.4. Currently, this would correspond to a price of approximately $167,000, well above Bitcoin’s present value.
The Cycle Extremes Oscillator Chart
This composite uses multiple indicators to signal cycle extremes. Currently, only half of the tracked conditions are met, suggesting the cycle has not yet reached a full-blown peak.
Pi Cycle Top Indicator
This signal identifies cycle peaks by comparing short-term and long-term moving averages. Currently, there is no crossover, indicating no classic top signal.
Sell-Side Risk Ratio (LTH Version)
This ratio compares total realized profits and losses to the realized market capitalization. High values correlate with late-stage bull markets, with the current reading at 0.46%, suggesting room for growth.
LTH Inflation Rate
The Long-Term Holder Inflation Rate is considered a bearish chart by Schultze-Kraft, signaling caution. Investors should monitor this closely for potential market shifts.
STH-SOPR (Short-Term Holder Spent Output Profit Ratio)
This metric assesses profit-taking by short-term holders. While elevated, it does not yet indicate the aggressive profit-taking typical of a market top.
SLRV Ribbons
These ribbons track trends in realized value. Currently, the moving averages are trending upward, with no indication of a market top at this time.
Overall, Schultze-Kraft advises against relying on single data points, emphasizing the importance of confluence in analysis. With Bitcoin’s evolving ecosystem, historical comparisons may be less reliable, yet they remain a valuable tool for understanding potential market directions.
While many metrics suggest Bitcoin’s market is moving into more euphoric and profitable territory, few have reached historical extremes. Investors should remain vigilant, as the current cycle may differ significantly from previous ones.
At present, Bitcoin is trading at $96,037.
