Bitcoin's Growth May Be Slowing, But Its Long-Term Strength Remains, Says Alphractal

New research from crypto analytics firm Alphractal suggests that Bitcoin's explosive growth phases are becoming more subdued with each market cycle — but that's not necessarily a bad thing.

Crypto analytics firm Alphractal has observed that the intensity of Bitcoin’s growth phases appears to be diminishing with each passing market cycle. Nevertheless, the firm highlights the persistence of long-term strength in the world’s leading cryptocurrency, even as explosiveness lessens.

In its latest report, Alphractal delves into the historical tendency of Bitcoin to peak at a multiple of its 2-year moving average (2Y SMA) during bull markets. However, the firm remarks that these multiples have demonstrated a gradual decline, hinting at the asset transitioning into a more mature and less volatile stage.

Early years saw Bitcoin's peak valuations at 15 times its 2Y SMA, but this dropped to 10 in 2017. Slipping further during the 2021 cycle, the asset saw a peak at 5 times the 2Y SMA, later revised down to 2.65 times. Notably, in the most recent cycle, Bitcoin failed to break above that 2.65 multiple of the 2Y SMA, further indicating the compression of returns and market stabilization.

Currently, Alphractal estimates the 2Y SMA ×2.65 level to be around $159,000, suggesting it as a potential price ceiling should momentum pick up again shortly.

Despite the narrowing gains, Alphractal analysts remain optimistic about Bitcoin's long-term path. "The opportunity to outperform the long-term average still exists," the firm stated, adding that each cycle continues to demonstrate structural strength, despite the lower highs.

In essence, Bitcoin seems to be entering a new phase of mature growth, which might be ideal for broader adoption and sustained value, especially for long-term investors.