Has Bitcoin Reached Its Cycle Top?

1/ MVRV Ratio: A longstanding measure of unrealized profitability, the MVRV ratio compares market value to realized value. Historically, readings above 7 signaled overheated conditions. “Currently hovering around 3 �?room to grow,�?Schultze-Kraft noted. This suggests that, in terms of aggregate unrealized profit, the market is not yet at levels that have previously coincided with macro tops.

2/ MVRV Pricing Bands: These bands are derived from the number of days MVRV has spent at extreme levels. The top band (3.2) has been exceeded for only about 6% of trading days historically. Today, this top band corresponds to a price of $127,000. Given that Bitcoin sits at around $98,000, the market has not yet reached a zone that historically marked top formations.

3/ Long-Term Holder Profitability (Relative Unrealized Profit & LTH-NUPL): Long-term holders (LTHs) are considered more stable market participants. Their Net Unrealized Profit/Loss (NUPL) metric is currently at 0.75, entering what Schultze-Kraft terms the “euphoria zone.�?He remarked that in the 2021 cycle, Bitcoin ran another ~3x after hitting similar levels (though he clarified he is not necessarily expecting a repetition). Historical top formations often saw LTH-NUPL readings above 0.9. Thus, while the metric is elevated, it has not yet reached previous cycle extremes.

Notably, Schultze-Kraft admitted his observations may be conservative because the 2021 cycle peaked at somewhat lower profitability values than prior cycles. “I would’ve expected these profitability metrics to reach slightly higher levels,�?he explained. This may signal diminishing peaks over successive cycles. Investors should be aware that historical extremes may become less pronounced over time.

4/ Yearly Realized Profit/Loss Ratio: This metric measures the total realized profits relative to realized losses over the past year. Previous cycle tops have seen values above 700%. Currently at around 580%, it still shows “room to grow�?before reaching levels historically associated with market tops.

5/ Market Cap To Thermocap Ratio: An early on-chain metric, it compares Bitcoin’s total market capitalization to the cumulative mining cost (Thermocap). In prior bull runs, the ratio’s extremes aligned with market tops. Schultze-Kraft advises caution with specific target ranges but notes that current levels are not close to previous extremes. The market remains below historical thermocap multiples that indicated overheated conditions in the past.

6/ Thermocap Multiples (32-64x): Historically, Bitcoin has topped at roughly 32-64 times the Thermocap. “We’re at the bottom of this range,�?said Schultze-Kraft. Hitting the top band in today’s environment would imply a Bitcoin market cap just above $4 trillion. Given that current market capitalization ($1.924 trillion) is significantly lower, this suggests the possibility of substantial upside if historical patterns were to hold.

7/ The Investor Tool (2-Year SMA x5): The Investor Tool applies a 2-year Simple Moving Average (SMA) of price and a 5x multiple of that SMA to signal potential top zones. “Which currently denotes $230,000,�?Schultze-Kraft noted. Since Bitcoin’s current price is well beneath this level, the indicator has not yet flashed an unequivocal top signal.

8/ Bitcoin Price Temperature (BPT6): This model uses deviations from a 4-year moving average to capture cyclical price extremes. Historically, BPT6 was reached in previous bull markets, and that band now sits at $151,000. With Bitcoin at $98,000, the market is still short of levels previously associated with peak overheating.

9/ The True Market Mean & AVIV: The True Market Mean is an alternative cost basis model. Its MVRV-equivalent, known as AVIV, measures how far the market strays from this mean. Historically, tops have seen more than 3 standard deviations. Today’s equivalent “amounts to values above ~2.3,�?while the current reading is 1.7. “Room to grow,�?Schultze-Kraft said, implying that by this metric, the market is not yet stretched to its historical extremes.

10/ Low/Mid/Top Cap Models (Delta Cap Derivatives): These models, based on the Delta Cap metric, historically showed diminished values during the 2021 cycle, never reaching the ‘Top Cap.�?Schultze-Kraft urges caution in interpreting these due to evolving market structures. Currently, the mid cap level sits at about $4 trillion, roughly a 2x from current levels. If the market followed previous patterns, this would allow for considerable growth before hitting levels characteristic of earlier tops.

11/ Value Days Destroyed Multiple (VDDM): This metric gauges the spending behavior of long-held coins relative to the annual average. Historically, extreme values above 2.9 indicated that older coins were heavily hitting the market, often during late-stage bull markets. Presently, it’s at 2.2, not yet at extreme levels. “Room to grow,�?Schultze-Kraft noted, suggesting not all long-term holders have fully capitulated to profit-taking.

12/ The Mayer Multiple: The Mayer Multiple compares price to the 200-day SMA. Overbought conditions in previous cycles aligned with values above 2.4. Currently, a Mayer Multiple above 2.4 would correspond to a price of approximately $167,000. With Bitcoin under $100,000, this threshold remains distant.

13/ The Cycle Extremes Oscillator Chart: This composite uses multiple binary indicators (MVRV, aSOPR, Puell Multiple, Reserve Risk) to signal cycle extremes. “Currently 2/4 are on,�?meaning only half of the tracked conditions for an overheated market are met. Previous tops aligned with a full suite of triggered signals. As such, the chart suggests the cycle has not yet reached the intensity of a full-blown peak.

14/ Pi Cycle Top Indicator: A price-based signal that has historically identified cycle peaks by comparing the short-term and long-term moving averages. “Currently the short moving average sits well below the larger ($74k vs. $129k),�?Schultze-Kraft said, indicating no crossover and thus no classic top signal.

15/ Sell-Side Risk Ratio (LTH Version): This ratio compares total realized profits and losses to the realized market capitalization. High values correlate with volatile, late-stage bull markets. “The interesting zone is at 0.8% and above, while we’re currently at 0.46% �?room to grow,�?Schultze-Kraft explained. This implies that, despite recent profit-taking, the market has not yet entered the intense sell pressure zone often seen near tops.

16/ LTH Inflation Rate: Schultze-Kraft highlighted the Long-Term Holder Inflation Rate as “the most bearish chart I’ve come across so far.�?While he did not provide specific target values or thresholds in this excerpt, he stated it “screams caution.�?Investors should monitor this closely as it may signal increasing distribution from long-term holders or other structural headwinds.

17/ STH-SOPR (Short-Term Holder Spent Output Profit Ratio): This metric measures the profit-taking behavior of short-term holders. “Currently elevated, but not sustained,�?Schultze-Kraft noted. In other words, while short-term participants are taking profits, the data does not yet show the kind of persistent, aggressive profit-taking typical of a market top.

18/ SLRV Ribbons: These ribbons track trends in short- and long-term realized value. Historically, when both moving averages top out and cross over, it indicates a market turning point. “Both moving averages still trending up, only becomes bearish at rounded tops and crossover. No indication of a top at this time,�?Schultze-Kraft stated.

Overall, Schultze-Kraft emphasized that these metrics should not be used in isolation. “Never rely on single data points �?confluence is your friend,�?he advised. He acknowledged that this is a non-comprehensive list and that Bitcoin’s evolving ecosystem—now with ETFs, regulatory clarity, institutional adoption, and geopolitical factors—may render historical comparisons less reliable. “This cycle can look vastly different, yet (historical) data is all we have,�?he concluded.

While numerous metrics show that Bitcoin’s market is moving into more euphoric and profitable territory, few have reached the historical extremes that marked previous cycle tops. Indicators like MVRV, profitability ratios, thermal metrics, and various price-based models generally suggest “room to grow,�?although at least one—LTH Inflation Rate—raises a note of caution. Some composites are only partially triggered, while classic top signals such as Pi Cycle Top remain inactive.

At press time, BTC traded at $96,037.

Why $180,000 Per Bitcoin Seems Plausible

Sigel explained that Bitcoin tends to outperform nearly every other asset class for three years out of each four-year halving cycle, followed by a deep correction in the fourth year. Referencing a drawdown typically ranging from 60% to 80%, Sigel said this decline often arrives roughly two years after the BTC halving event.

Since Bitcoin’s most recent halving took place in April 2024, Sigel sees 2024 and 2025 as potentially strong years. “That down year typically is the second year after the halving,�?Sigel explained. “The Bitcoin halving occurred in April of this year. So 2024 [will be a] strong year, 2025 should be a strong year. I think 2026, unless something changes, would be a down year.�?/p>

Drawing on historical data, he recalled the smallest trough-to-peak appreciation in Bitcoin’s previous cycles, which was approximately 2,000%. Even if that figure halves to 1,000%, Sigel pointed out that Bitcoin could rise from a trough of around $18,000 to as high as $180,000 in the current cycle. “So I see an upside to $180,000 this cycle, and I think that’s likely to happen next year,�?Sigel added.

He also emphasized that Bitcoin’s volatility means the price could overshoot or undershoot that number, but that $180,000 represents a plausible target for 2024 if the pattern holds and no major “red light�?indicators appear.

Sigel broke down what he sees as the most important topping signals for traders to watch. The first involves derivatives funding rates: if the annualized cost to hold bullish Bitcoin positions on leveraged markets pushes above 10% for longer than a couple of months, Sigel considers that a red flag.

“Some of those indicators include the funding rates. When the funding rate for Bitcoin exceeds 10% for more than a couple months, that tends to be a red light,�?Sigel warned and explained that recent market activity reset elevated funding rates: “[Last week’s] washout eliminated that as well. So funding rates [are] not really flashing red.�?/p>

The second is the level of unrealized profits on the blockchain, where on-chain analysis can reveal whether market participants�?cost basis is so low that significant profit-taking might soon create selling pressure. “We’re not seeing scary amounts of unrealized profits [yet],�?Sigel noted.

Finally, he said anecdotal evidence of widespread retail leverage or speculation could also flash warning lights. He explained that if all these risk indicators were to align at a certain price point—for example, if Bitcoin hit $150,000 and these metrics pointed to a market top—he would be cautious. However, he said that if the price reached around $180,000 without those signals appearing, there might still be room for further appreciation.

“If we reach $180K and none of those lights are flashing, maybe we let it run. If all those lights are flashing and the price is $150K, I’m not gonna wait,�?Sigel added.

Next BTC Cycle Predictions

He also explored the longer-term growth potential for Bitcoin by comparing it to gold’s market capitalization. Because about half of gold’s supply is used for industrial and jewelry purposes, he reasoned that the other half can be compared more directly to Bitcoin’s function as an investment and store of value.

If Bitcoin were to reach a valuation comparable to that half portion of gold’s market cap, Sigel believes the price could trend toward roughly $450,000 per coin over the course of the next cycle.

Taking an even more forward-looking perspective, he described VanEck’s long-term model in which global central banks might eventually hold Bitcoin as part of their reserves, even if just at a 2% weighting. Since gold constitutes about 18% of central bank reserves worldwide, Sigel’s assumption is that Bitcoin’s share would be far smaller by comparison.

He also factored in the prospect that Bitcoin might one day serve as a settlement currency for global trade, potentially among emerging economic alliances such as the BRICS nations (Brazil, Russia, India, China, and South Africa), which could push its valuation significantly higher. In VanEck’s calculations, this scenario might place Bitcoin at $3 million per coin by 2050:

“We also assume that Bitcoin is used as a settlement currency for global trade, most likely among BRICS countries. We get to three million dollars a coin by 2050, which would be about a 16% compound annual growth rate.�?/p>

At press time, BTC traded at $107,219.