One of the dominant stories of this cycle is that “it’s different this time.” By reshaping the supply and demand dynamics of Bitcoin, many argue that they don’t see anything like the euphoric blow-off top that defined past cycles. Instead, the idea is that smart money and ETFs will smooth out volatility and replace enthusiasts with mature. But is that really true?
Emotions drive markets, even institutions
Skeptics often dismiss tools such as fear and greedy index as too simple, arguing that they cannot capture the nuances of institutional flows. But robbing emotions ignores the fundamental truth that the institution is still run by people, and people, no matter how deep the pockets, remain susceptible to the same cognitive and emotional biases that drive the market cycle!
Figure 1: Fear and greed indicators still show that the opposite extreme regions are the best regions to function as paradoxes. View live charts
Although volatility has diminished compared to previous cycles, travel from $15,000 to $120,000 is not overwhelming. And importantly, Bitcoin achieved this without the deep, expanded drawdown that marked the bull market of the past. The ETF boom and the accumulation of the Ministry of Corporate Treasury have shifted supply dynamics, but the basic feedback loop of greed, fear and speculation remains intact.
The market bubble is a timeless reality
Not only Bitcoin is susceptible to parabolic execution, but the bubble has been part of the market for centuries. Asset prices are driven by human behavior and are repeatedly surged beyond the basics. Studies consistently show that stability itself often breeds instability, and quiet periods promote leverage, speculation, and ultimately runaway price action. Bitcoin followed this same rhythm. During periods of low volatility, there has been an increase in open interest, leveraged builds and speculative bets.
Figure 2: Open interest has historically skyrocketed during the low volatility period. This is a setup that often precedes sharp parabolic movements. View live charts
Contrary to the belief that “sophisticated” investors are immune, research from the London School of Economics suggests opposition. Professional capital can accelerate bubbles by accumulating recent build-up, chasing momentum and amplifying movement. The 2008 Housing Crisis and the.com Bust were headed by an agency rather than retail-driven.
ETF Flow This cycle provides another powerful example. The period of net spill from spot ETFs is actually in line with the bottom of the local market. Rather than fully timing the cycle, these flows reveal that “smart money” is as prone to post-investment swarm behavior and trends as retailers do.
Figure 3: ETF outflow (red) is consistently in line with the bottom of the local market, which is the opposite signal. View live charts
Capital flow could ignite the next leap in Bitcoin
On the other hand, looking at the global market, it shows how capital rotations fire on another parabolic leg. Since January 2024, gold’s market capitalization has skyrocketed from $14T to $24T to over $10 trillion. For Bitcoin, which currently has a market capitalization of around 2T, even a small portion of that kind of influx can have a huge effect thanks to the money multiplier. With about 77% of BTC held by long-term holders, only about 20-25% of the supply is easily liquid, making it a four-fold conservative money multiplier. That means a new inflow of $500 billion, just 5% of gold’s recent expansion, could lead to a $2 trillion increase in Bitcoin’s market capitalization, meaning a price well above $220,000.
Figure 4: Long-term holder supply remains rising, consistent with cycle-center dynamics, rather than late distribution. View live charts
Perhaps the most powerful case of a blow-off top is seeing a parabolic gathering already in this cycle. Since 2022, Bitcoin has performed multiple 60-100%+ runs within 100 days. Overlaying these fractals with current price action provides a realistic overview of how prices can reach between $180,000 and $220,000 by the end of the year.
Figure 5: The early historic fractal of this cycle project could be a pass to 200k+ Bitcoin.
The potential for a bitcoin parabolic remains unshakable
The story of institutional adoption eliminated parabolic blow-off tops underestimates both Bitcoin’s structure and human psychology. The bubbles are not a retail speculation accident. They are a recurring feature of historical markets, often accelerated by sophisticated capital.
This does not mean certainty. The market never functions that way. However, dismissing the possibility of top parabolics ignores market behavior for centuries and the unique supply demand mechanism that makes Bitcoin one of the most reflective assets in history. If anything, “It’s different this time” might mean that the rally is bigger, faster and more dramatic than most expected.
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Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making an investment decision.
This post-parabolic bitcoin rally is here. Some of them first appeared in Bitcoin Magazine and were written by Matt Crosby.
