Bitcoin (BTC) is not yet in the euphoric stage, as realized market cap indicator is still far from peaking

Bitcoin (BTC) may still have a long run before a euphoria-stage bull cycle. Based on realized market capitalization, BTC lags behind previous bull cycles as the price consolidates above $100,000.

Bitcoin (BTC) is not yet near its euphoric stage, based on the metric of realized market capitalization. The leading coin once again raised questions on its exact spot in the market cycle, as 2025 is expected to reach new all-time highs. BTC hovered above $104,576, recovering after last week’s dip under $100,000.

The value of the realized cap since the cycle low is up 2.1 times, still far from the usual peak for previous cycles. During the latest market cycle, counted from January 2023, BTC had the most gradual increase of its realized price since the cycle low. The metric tracks the early stage of the 2015-2018 cycle, with more upside based on previous bull markets. 

Usually, a cycle top is preceded by a jump or nearly vertical growth of realized cap, with a growth of up to 5.7 times. Based on this metric, BTC is still far from its euphoria stage. The BTC realized price hovers over $42,000, up from $20,000 in 2022. Multiple early buyers are still holding from much lower acquisition prices, keeping the realized price lower.

BTC is seen as a long-term strategic reserve, with buyers aiming to retain a balance to tap a higher future price range. This has prevented panic-selling and capitulations, while riskier traders use the derivative market to place short-term speculative bets.

During the current cycle, both whales and retail have been more cautious, either holding or taking profits during favorable price runs. However, the lowered volatility also means the realized market cap is growing more slowly. 

BTC goes through less volatile market cycle

Based on previous market drawdowns, the current BTC cycle resembles the 2015-2018 price moves. BTC is now repeating the slower initial climb, with smaller drawdowns instead of panic.

Leveraged trading is more strategic, avoiding the biggest panic-inducing liquidations. Additionally, funds dedicated to BTC stay with the largest coin and do not flow into altcoins and tokens, which have their separate sources of liquidity.

The current cycle may continue with the early, more gradual bullish stage before extending into the euphoria breakout. 

On the positive side, BTC has come to expect smaller drawdowns, rarely exceeding 25%. BTC price moves no longer reflect sheer panic and are the result of more strategic trading. 

The current market no longer holds the expansion potential of the earliest BTC price moves. The last euphoric stage of the market also requires a new inflow of funds from previously untapped investors. 

For BTC, the long history has already made the asset mainstream and widely accessible. The new inflow of funds is expected from corporate buyers or for the creation of other reserves, potentially from governments. For now, retail buying has been relatively slow compared to previous cycles, and despite reaccumulation, retail wallets hold a smaller percentage of the BTC supply. ETF demand also supports the current price action, although it still does not lead to the euphoria stage. 

The current trades of around $100,000 were seen as an opportunity to cash out, especially from older whales. However, there is no consensus on whether this price range is at the top of the BTC potential. BTC has been riding the US elections hype for three months now, with no significant drawdowns. More than 97% of wallets are in the money, with limited price pressure even from those selling at a loss. 

Instead of starting a euphoric rally above $100,000, BTC consolidates and trades similarly to previous periods.

BTC still moves based on liquidations of leveraged positions while getting support from spot buyers, including retail and whales. The leading coin may attempt a short-term rally above $110,000, but the expectation for the coming months is to test the $120,000 range.

Cryptopolitan Academy: Are You Making These Web3 Resume Mistakes? - Find Out Here