Bitcoin’s Curious Cycle: No Euphoria, Just Holders!

by

Dear Reader, it is with a most solemn countenance that I must inform you that Bitcoin’s on-chain metrics have descended into the depths of what is commonly termed “deep-value,” a state usually reserved for the most desolate of cycle bottoms. Yet, one might observe, the price has only retreated a mere 40% from its lofty peak, a figure far less dramatic than the 75% to 85% declines that have historically marked prior bear cycles. A most peculiar anomaly, to be sure.

Behold, six indicators now concur in their dire prognosis, painting a market that has reset without the customary euphoric crescendo. The long-term holders, those steadfast souls, have refused to part with their coins, a defiance that borders on the impertinent.

Bitcoin Cycle: Capitulation Without a Collapse

Three indicators, each a most sensitive creature, measure the stress between price and trend, and all three agree in their lamentations.

The Mayer Multiple Z-Score, that most enigmatic of metrics, has descended into the realm of -1.5 standard deviations. A rarity, to be sure, having graced us only twice before: in March 2020, when the price lingered near $3,000, and during the FTX collapse in late 2022, when it flirted with $19,000. Now, it languishes at roughly $62,000, though BTC has since ascended to $80,000, a most vexing turn of events.

The Bitcoin Sharpe Ratio, that paragon of risk assessment, also confirms this condition, having slipped into its “Low Risk” band. A territory previously occupied by the cycle lows of 2015, 2019, and 2022, though the sample size remains as modest as a maiden’s dowry.

Each prior tag, though, heralded a most robust upward leg, though one might argue the evidence is as scarce as a well-dressed gentleman at a country ball.

The percentage of supply held in loss, according to In The Cryptoverse, has climbed near 39%, a figure that historically appears in the waning days of bear markets, not while the price dangles in six figures. The divergence between price and holder pain is the cycle’s most curious anomaly, a riddle wrapped in a mystery, tied with a bow of confusion.

Bitcoin’s 200-week moving average, that steadfast guardian of every prior cycle, has acted as the floor of every prior cycle. It broke briefly in 2018, was wickedly below in 2020 and 2022. This time, however, it tagged and held without a clean violation, a most uncharacteristic display of restraint.

A Bitcoin Cycle With No Top

The capitulation signals are striking, in part because they lack the customary counterpart: the euphoric top. One might imagine the market as a society ball where no one is dancing, only standing in corners with their coins clutched tightly.

The CBBI Bitcoin Bull Run Index, that composite of cycle metrics, has never tagged its red zone above 80 during this run. Every previous bull cycle, including 2013, 2017, and 2021, hit that threshold cleanly. The current chart, however, explicitly marks the missed signal with an X, a most unflattering mark of distinction.

Glassnode’s Net Unrealized Profit and Loss (NUPL) data tells a similar tale. The metric, with its color-coded zones from blue euphoria to red capitulation, has topped out in the green “belief” zone without ever crossing into blue. A most unimpressive display, one might say.

By that measure, the market never reached the mass-greed reading that historically defined a cycle high. NUPL has since rolled lower into orange territory, the band associated with mid-bear or pre-bottom positioning. A trajectory that mirrors the path it traced in 2018 and 2022, though the underlying price action differs sharply, much like a sister’s temperament and a cousin’s.

The Cohort That Refused to Sell

The most unusual signal lies in the behavior of long-term holders. One might imagine them as the most obstinate of society matrons, refusing to part with their coins even when the price dips.

Glassnode defines long-term holders (LTH) as wallets that have held coins for at least 155 days. In every prior cycle, this cohort distributed heavily into the top, a practice that has been as reliable as a well-timed waltz. The LTH supply curve dropped as new buyers absorbed the available coins. That pattern repeated cleanly in 2014, 2018, and 2021, a most satisfactory precedent.

This cycle, however, has broken that pattern. LTH supply dipped slightly in 2024, but it has since returned to record levels above 14.5 million BTC. Long-term holders now sit near peak conviction with price still well above the 200-week moving average, a most curious state of affairs.

The behavior carries two possible readings. The bullish interpretation suggests long-term holders are waiting for a higher peak that has yet to arrive, a hope as enduring as a lover’s promise. The structural interpretation points to a different LTH composition: ETF cold storage, sovereign reserves, and corporate treasuries with non-cyclical mandates. A most unexciting explanation, if one may say so.

Both readings support the broken-cycle thesis. Neither one alone explains a continued bear case from current levels, a fact that leaves one in a state of polite confusion.

An Asymmetric Setup

The combined picture across six on-chain charts presents an unusual triangulation. Capitulation-grade readings appear in three price-derived metrics.

No euphoria appears in two sentiment-derived metrics. No distribution appears in the cohort that historically defines the top. A most singular confluence, to be sure.

Markets rarely show all three conditions at once, a fact that renders this scenario as rare as a well-mannered duke.

The simplest version of the thesis suggests Bitcoin just absorbed a deep on-chain reset without holding a euphoric top. Meanwhile, the holders most likely to sell have refused, a defiance as puzzling as a gentleman’s refusal to dance.

Historically, that combination has resolved to the upside, a most encouraging prospect for the hopeful investor.

A counterargument deserves space. If the four-year cycle model is genuinely broken, the same logic should apply to the prior cycle bottom signals. The Mayer Z, Sharpe Ratio, and capitulation reads work as buy zones because they reflect a recurring market psychology. A structurally different cycle could mean those signals carry less predictive weight than past performance suggests, a most disheartening thought.

For long-term observers, the on-chain picture nonetheless skews asymmetric. Price sits well below the cycle high yet remains above the 200-week moving average. The Holder conviction remains intact, and historically rare buy signals have aligned. Whether the cycle delivers another leg up or settles into a longer consolidation, the current data set stands out. It is the most coherent on-chain bottom signal Bitcoin has produced in years, a most surprising revelation.

Read More

2026-05-08 02:14