Monthly report · May 28, 2025
Volatility Kills the Trend: Why the Next Bitcoin Top Might Surprise You
A May CounterFlow monthly report on why lower-volatility cycles like 2017 tend to produce stronger, later tops than explosive ones like 2021, and why Dominance, Google Trends, and Funding Rate still argue the current cycle is not done yet.
Volatility kills the trend. Comparing global liquidity conditions, the current cycle looks closer to 2017's slow grind than 2021's pandemic-fueled spike, which argues for a later, more expressive top rather than an early blow-off. Dominance, Google Trends, and Funding Rate all still read as early-cycle, not euphoric-top.
Before we compare cycle tops, it's important to contextualize to better understand the dynamics behind them.
Due to the global liquidity scenario, the current cycle more closely resembles 2017 than the previous cycle in 2021. In the 2021 cycle, there was a strong injection of liquidity in response to the pandemic, which resulted in a highly volatile movement. Cycles with high volatility tend to lose steam earlier, as volatility itself compromises the continuation of the trend. In other words, what makes Bitcoin fall is precisely it rising too much, too fast. A little-known concept that explains this is: "Volatility Kills the Trend."