One of the dominant narratives this cycle has been that “this time is different.” With the institutional adoption that remodel the dynamics of the supply and demand of Bitcoin, many argue that we will not see the type of euphoric explosion cover that defined the past cycles. Instead, the idea is that intelligent money and ETF will soften volatility, replacing mania with maturity. But is that really the case?
Sentimentation drives markets, even for institutions
Skeptics often rule out tools such as the fear and greed index as too simplistic, arguing that they cannot capture the nuance of institutional flows. But canceling the feeling ignores a fundamental truth that institutions are still directed by people, and people remain prone to the same cognitive and emotional biases that drive market cycles, regardless of how deep their pockets are!
Although the volatility has decreased compared to the previous cycles, the movement of $ 15,000 to more than $ 120,000 is far from disappointing. And crucial, Bitcoin has achieved it without the type of deep and extended reduction that marked the upward markets beyond. The accumulation of the boom and the corporate treasure of the ETF have changed the supply dynamics, but the basic feedback cycle of greed, fear and speculation remains intact.
Market bubbles are a timeless reality
It is not just Bitcoin that is susceptible to parabolic races, bubbles have been part of the markets for centuries. Asset prices have increased repeatedly beyond the foundations, fed by human behavior. Studies constantly show that stability itself often generates instability, and that silent periods encourage leverage, speculation and, finally, the trigger price action. Bitcoin has followed this same rhythm. Low volatility periods see the open interest increase, leverage construction and speculative bets increase.
Contrary to the belief that “sophisticated” investors are immune, the investigation of the London School of Economics suggests otherwise. Professional capital can accelerate bubbles accumulating at the end, chasing impulse and amplifying movements. The 2008 housing crisis and the Bust of the points-com were not driven by retail trade, but directed by institutions.
The ETF flows this cycle provides another powerful example. The periods of net exits of the ETF Spot have coincided with the local market funds. Instead of perfectly timing the cycle, these flows reveal that “intelligent money” is so prone to the behavior and trend of the flock after investing as retail merchants.
Capital flows could light the next Bitcoin jump
Meanwhile, looking at global markets shows how capital rotation could light another parabolic leg. Since January 2024, Gold’s Market Cap has increased by more than $ 10 billion, from $ 14t to $ 24t. For Bitcoin, with a current market capitalization around $ 2T, even a fraction of such entry could have a huge effect thanks to the money multiplier. With approximately 77% of BTC in the hands of long-term holders, only around 20-25% of the supply is easily liquid, resulting in a 4x conservative money multiplier. That means that new tickets of $ 500 billion, only 5% of Gold’s recent expansion, could be translated into an increase of $ 2 billion in Bitcoin market capitalization, which implies prices of more than $ 220,000.
Perhaps the strongest case for a Blowoff lid is that we have already seen parabolic manifestations within this same cycle. From the 2022 fund, Bitcoin has organized multiple 60–100%+ runs in less than 100 days. The overlap of these fractals in the current price action provides realistic schemes of how the price could reach $ 180,000, $ 220,000 before the end of the year.
Bitcoin’s parabolic potential remains unwavering
The narration that institutional adoption has eliminated the parabolic explosion tops underestimate both the Bitcoin structure and human psychology. Bubbles are not a retail speculation accident; They are a recurring characteristic of markets throughout history, often accelerated by sophisticated capital.
This does not mean certainty, markets never work that way. But discarding the possibility of a parabolic upper parties centuries of market behavior and the unique mechanics of supply demand that makes Bitcoin one of the most reflective assets in history. In any case, “this time is different” can only mean that the rally could be larger, faster and more dramatic than most expect.
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Discharge of responsibility: This article is only for informative purposes and financial advice should not be considered. Always do your own research before making investment decisions.