Bitcoin’s Four-Year Cycle Remains intact, Suggests Recent Market Signals: Analysis
NEW YORK – Despite underperformance in the year-to-date market, analysis from bitmex suggests Bitcoin’s (BTC) historically consistent four-year cycle – driven by the halving event – is highly likely still in effect, with the current phase perhaps being the “wind down and recovery” stage. The analysis points to recent market behavior and ancient patterns following previous halvings as evidence.
every four years, Bitcoin’s network undergoes a “halving,” reducing the BTC mining reward and slowing new supply. Historically, this event has been followed by a predictable sequence: accumulation, a parabolic rally, a speculative peak, and subsequent collapse followed by recovery.
BitMEX outlined the pattern across previous cycles:
* 2012-2014: The first halving spurred a bull market, with prices rising from double digits to over $1,000 before the Mt. gox collapse.
* 2016-2018: The second halving fueled the 2017 mania and Initial Coin offering (ICO) boom, preceding a 2018 bear market triggered by China’s regulatory crackdown and an influx of token issuances.
* 2020-2022: The third halving initiated crypto’s institutional adoption – including investments from companies like Tesla and the emergence of ETFs - culminating in the 2021 high, followed by the 2022 downturn linked to the failures of LUNA, Three Arrows Capital (3AC), and FTX.
* 2024 onward: The most recent halving occurred on April 19, 2024, reducing issuance to 3.125 BTC, placing the market midway through the fourth cycle.
Analysts have observed that peaks typically occur 12-18 months after each halving. the underlying mechanism is described as “self-reinforcing: lower supply, rising demand, euphoric speculation, and eventual exhaustion.”
BitMEX concluded that if the cycle had ended, Bitcoin should be leading the current “risk-on” environment, but its relative weakness suggests the cycle is approaching its final phase - a wind down and recovery period. The firm also noted emerging “cracks” within the crypto ecosystem indicating a potential deep correction specific to the crypto market.
Furthermore, BitMEX highlighted that high leverage and the dominance of perpetual futures contribute to market instability, creating excess during bull phases and meaningful drawdowns. Bitcoin’s lagging performance year-to-date and a recent $20 billion liquidation cascade were cited as signals of cyclical fatigue, rather than maturation.
