Will Bitcoin Price Defy Diminishing Returns This Cycle?

Every bitcoin price bull market to date has followed a familiar pattern of explosive upside followed by sharp drawdowns, with each cycle delivering lower percentage gains than the last. This phenomenon, known as diminishing returns, has become one of the most persistent narratives in Bitcoin. The question now is whether this cycle will follow the same trajectory or if the maturation of Bitcoin as an asset class could bend the pattern.

Bitcoin Price and Diminishing Returns

So far this cycle, we have witnessed approximately 630% BTC Growth Since Cycle Low to the most recent all-time high. That compares to more than 2,000% in the previous bull market. To match the last cycle’s magnitude, Bitcoin would need to reach around $327,000, a stretch that looks increasingly unlikely.

Evolving Bitcoin Price Dynamics

One reason for the less explosive upside gains can be seen in the Supply Adjusted Coin Days Destroyed (CDD) metric, which tracks the velocity of older coins moving on-chain. In past cycles, such as the 2021 bull market, long-term holders tended to sell after Bitcoin had already appreciated ~4x from its local lows. However, in this cycle, similar levels of profit-taking have occurred after just 2x moves. More recently, spikes in CDD have been triggered by even smaller price increases of 30–50%. This reflects a maturing investor base: long-term holders are more willing to realize gains earlier, which dampens parabolic advances and smooths out the market structure.

Another factor is Bitcoin Volatility. Bitcoin’s quarterly volatility has trended steadily lower. While this reduces the odds of extreme blow-off tops, it also supports a healthier long-term investment profile. Lower volatility means the capital inflows required to move price grow larger, but it also makes Bitcoin more attractive to institutions seeking risk-adjusted exposure.

This shows up in the Bitcoin Sharpe Ratio, where Bitcoin currently scores more than double that of the Dow Jones Industrial Average. In other words, Bitcoin still offers superior returns relative to its risk, even as the market stabilizes.

Bitcoin Price and the Golden Ratio

From a technical perspective, The Golden Ratio Multiplier provides a framework for projecting diminishing returns. Each cycle top has aligned with progressively lower Fibonacci multiples of the 350-day moving average. In 2013, price reached the 21x band. For the 2017 top, it reached the 5x band, and in 2021, the 3x band. This cycle, Bitcoin has so far tagged the 2x and 1.6x bands, but a push back toward the 2x…