Written by: beincrypto
Compiled by: Blockchain Knight
A year has passed since BTC's most recent halving, and the current cycle is presenting a distinctly different pattern. Unlike previous cycles with explosive post-halving rallies, BTC's current rise has been moderate, increasing by only 31%, compared to a 436% surge in the previous cycle during the same period.
Meanwhile, long-term holder indicators (such as the MVRV ratio) show a sharp decline in unrealized profits, indicating a maturing market with compressed upside potential. Collectively, these changes suggest that BTC may be entering a new era characterized not by parabolic peaks, but by gradual, institution-driven growth.
BTC One Year After Halving: A Unique Cycle
The development of the current BTC cycle differs significantly from previous cycles, potentially signaling a transformation in market reactions to halving events.
In early cycles (especially from 2012 to 2016 and from 2016 to 2020), BTC typically experienced strong rallies during this phase. The post-halving period usually featured strong upward momentum and parabolic price movements, primarily driven by retail enthusiasm and speculative demand.
However, the current cycle has taken a different path. Prices did not accelerate after the halving but instead began surging early in October and December 2024, followed by consolidation in January 2025 and a pullback in late February.
This early rally behavior diverges dramatically from historical patterns, where halving typically served as a catalyst for significant price increases.
Multiple factors contribute to this shift. BTC is no longer merely a speculative asset driven by retail investors; it is increasingly viewed as a mature financial instrument. Growing institutional participation, coupled with macroeconomic pressures and market structural changes, have led to more cautious and complex market responses.
BTC cycle comparison. Source: Bitcoin Cycles Comparison
Another evident sign of this evolution is the diminishing intensity of each cycle. As BTC's market cap grows, the explosive gains of earlier years become increasingly difficult to replicate. For instance, in the 2020-2024 cycle, BTC rose 436% one year after halving.
In contrast, the current cycle's increase during the same period is only 31%, considerably more moderate.
This transformation might indicate BTC is entering a new chapter characterized by reduced volatility and more stable long-term growth. Halving may no longer be the primary driver, with factors like interest rates, liquidity, and institutional capital playing increasingly significant roles.
The rules of the game are changing, and BTC's trajectory is changing with them.
Despite this, it's worth noting that previous cycles also experienced consolidation and pullback phases before resuming an upward trend. While this phase might feel slow or lacking excitement, it could represent a healthy adjustment before the next rally.
The current cycle could still deviate from historical patterns. Instead of a dramatic top bubble burst, it might present a more sustainable, structurally sound upward trend driven more by fundamentals than hype.
Long-Term Holders' MVRV Ratio Reveals BTC's Mature Market
Long-term holders' (LTH) market value and MVRV ratio have been reliable indicators of unrealized profits. They show the profits long-term investors accumulate before starting to sell. However, this value has been declining over time.
In the 2016-2020 cycle, the LTH MVRV ratio peaked at 35.8, indicating massive book profits and a clear top forming. In the 2020-2024 cycle, this peak dramatically dropped to 12.2, despite BTC reaching an all-time high.
In the current cycle, the LTH MVRV ratio's highest value so far is only 4.35, a significant reduction. This indicates that long-term holders' gains are far lower than in previous cycles, despite a substantial BTC price increase. The trend is clear: each cycle's profit multiplier is declining.
BTC's explosive upside potential is being compressed, and the market is maturing.
Currently, the highest LTH MVRV ratio reading in this cycle is 4.35. This substantial decline suggests that long-term holders' profit multipliers are much lower compared to previous cycles, even with significant BTC price increases. This pattern points to a conclusion: BTC's upside potential is being compressed.
BTC Long-Term Holders MVRV. Source: glassnode
This is no coincidence. As the market matures, explosive returns become naturally more difficult to achieve. The era of extreme, cycle-driven profit multipliers may be fading, replaced by more moderate or stable growth.
The growing market size means exponentially more capital is required to significantly drive price increases.
However, this doesn't confirm that the current cycle has peaked. Previous cycles typically included long consolidation or minor pullback phases before reaching new highs.
With institutional investors playing an increasingly important role, the accumulation phase might last longer. Therefore, peak profit selling might not be as sudden as in earlier cycles.
If the trend of declining MVRV ratio peaks continues, it could reinforce the view that BTC is transitioning from wild, cyclical surges to a more moderate but structured growth model.
The most intense rallies might be over, especially for investors entering the market in the later stages of the cycle.
