Bitcoin's Cycle Changes This Year..."Past Highs Don't Apply"

▲ Bitcoin (BTC)

Even with Bitcoin (BTC) exceeding $81,000, on-chain analysis indicates that the current market has deviated from the traditional halving cycle formula, as overheating signals that typically recur at past cycle highs have not appeared.

According to BeInCrypto on May 15 (local time), Bitcoin is showing a different trend from the typical indicators that defined past cycle highs. The Market Value to Realized Value (MVRV) Z-score, exchange reserves, and Bitcoin spot ETF holdings suggest that the current market is closer to a structural change than a typical late-cycle overheating phase. While individual investor overheating signals are quiet, institutional accumulation has expanded to an all-time high.

The Bitcoin Market Value to Realized Value (MVRV) Z-score was a key indicator pointing to past cycle highs, but it has not sounded an alarm in this cycle. This indicator measures the gap between Bitcoin's market value and realized value, with values exceeding 6 historically acting as cycle highs. During the cycle highs of 2013, 2017, and 2021, this indicator surged to around 12, 11, and 7 respectively, with the 2017 high being around 10 and the 2021 high around 7. However, in the bull run after this halving, the indicator's high only reached around 3.5, and as of May 14 (local time), it remained close to 1.

A decrease in exchange reserves also shows a market structure different from the past. According to Glassnode data, Bitcoin held on exchanges consistently decreased after exceeding 3.3 million BTC in early 2022, falling to approximately 3 million BTC by May 2026. During the same period, Bitcoin surpassed its previous cycle high and reached $126,000 in October 2025. This trend of decreasing circulating supply on exchanges while prices rise indicates that buyers are moving coins to direct custody accounts rather than leaving them on exchanges.

The absorption of supply by Bitcoin spot ETFs has also been identified as a key variable changing this cycle. U.S. Bitcoin spot ETFs did not exist before January 2024, but these products now hold approximately 1.3 million BTC, representing about 6.5% of the circulating supply. BlackRock's IBIT accounts for the largest share, followed by Fidelity's FBTC and Grayscale products. ETFs continued to absorb Bitcoin even during periods of price stagnation, and the rate of absorption often exceeded the daily mining issuance.

BeInCrypto analyzed that a structure has formed where prices can rise even without individual investor overheating, driven by decreasing exchange supply combined with ETF-centric institutional buying. In past cycles, expanded on-chain participation and retail FOMO buying created peak signals, but in this market, the trend of institutional buyers competing for a limited circulating supply has been more prominent. However, ETF fund flows can reverse at any time, and concentrated institutional holdings could increase new risks due to asset allocation adjustments and changes in macro liquidity.

The conclusion from this on-chain data is that Bitcoin has transformed into a market where past cycle indicators are difficult to apply directly, rather than simply indicating an inevitable price increase. The Market Value to Realized Value (MVRV) Z-score has not yet entered the typical overheating zone, exchange reserves have continued to decrease since 2022, and Bitcoin spot ETFs have absorbed 6.5% of the circulating supply. The Bitcoin market has entered a new phase where institutional supply and demand and reduced circulating supply, rather than individual investor fervor, dictate price movements.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*