Is the Bitcoin Bull Cycle Over?

After reaching new all-time highs earlier this year, Bitcoin has entered a multi-month period of choppy price action, leading many to wonder if the bull cycle is over. In this article, we dive deep into key metrics and trends to understand if the market is just cooling off or if we've already seen the peak for this cycle.

Fundamentally Overvalued?

One of the most reliable tools for gauging Bitcoin's market cycles is the MVRV Z-Score. This metric measures the difference between Bitcoin's market cap and its realized cap, or cost-basis for all circulating BTC, helping investors determine whether Bitcoin is over or undervalued according to this ‘fundamental’ cost of BTC.

Recent data shows that the MVRV Z-Score has demonstrated a sustained downward movement, which might suggest that Bitcoin's upward trajectory has ended. However, a historical analysis tells a different story. During previous bull cycles, including those in 2016-2017 and 2019-2020, similar declines in the MVRV Z-Score were observed. These drawdown periods were followed by significant rallies, leading to new all-time highs. Thus, while the current downtrend may seem concerning, it's not necessarily indicative of the bull cycle being over.