Has the four-year cycle driven by BTC halving failed?
The time from halving to the bottom and top of BTC is over 500 days, and this has worked in the last 5 instances. Will this pattern fail next time?Author: Zhou Zhou, Foresight News
Does the four-year cycle driven by BTC halving still work?
Looking back at the previous three crypto cycles: the peak of the first cycle: December 2013; the peak of the second cycle: December 2017; the peak of the third cycle: November 2021… In the previous three cycles, BTC strictly followed a four-year cycle, repeating itself.
Moreover, the time from halving to BTC hitting the bottom and the peak has been over 500 days, and this has been effective in the last five instances. For example, the time from this halving to the lowest point of this cycle is 517 days.
However, recently, as BTC fell to 52,000 USDT, market sentiment has soured, and some practitioners believe that BTC will break the pattern of the four-year cycle. Reasons include but are not limited to:
- Before this cycle's halving, BTC price broke historical highs. Historically, BTC has only broken historical highs after halving (Anomaly 1).
- The performance of BTC in the four months following halving is the worst in this cycle (Anomaly 2).
- The impact of halving is significant in the early stages, and it diminishes over time. (Internal Factors)
- The influence of external macro events on Bitcoin is gradually increasing, increasingly dominating BTC (External Factors).
Under the influence of internal and external factors, as well as multiple anomalies, practitioners have developed deep doubts about the regularity of Bitcoin's four-year cycle after halving.
However, the above reasons are not entirely valid. Some reasons actually prove the effectiveness of the four-year crypto cycle.
From a phenomenological perspective, Anomaly 1 and Anomaly 2 are not decisive phenomena.
Anomaly 1: The reason BTC broke historical highs before halving is due to events like Bitcoin ETFs and market expectations prior to the halving.
Anomaly 2: Due to the previous sharp rise in BTC, which overextended future gains, the recent pullback is precisely a return to a normal trend.
Three other phenomena are worth noting:
Phenomenon 1: In the last cycle, why did BTC still adhere to the four-year cycle driven by halving despite encountering the "May 19 crash" and the "NFT bull market"?
The "May 19 crash" in 2021, caused by policy reasons, did not lead BTC directly into a bear market; instead, it reached a peak again in November.
In the six months following BTC's peak in November, NFT prices continued to rise for six months. This means: Although Web3 is still very hot and Web3 applications are in a bull market, BTC has already been in a bear market for six months.
These two significant anomalies still did not change BTC's four-year cycle pattern.
Phenomenon 2: The rule of "bear markets lasting only one year" has not been broken in this cycle. The lowest point of this cycle is one year away from the highest point of the previous cycle.
Phenomenon 3: The time from halving to BTC hitting the bottom and the peak is over 500 days, and this has been effective in the last five instances.
The time from halving to BTC hitting the bottom and the peak is over 500 days, and this pattern has not been broken since 2015, including the most recent bottoming time.
- The first halving occurred on November 28, 2012. One year later, the bull market ended on December 5, 2013.
- The second halving occurred on July 9, 2016. One year and three months later, the bull market ended in December 2017. The bottom was hit 547 days before halving, and the peak was reached 518 days after halving.
- The third halving occurred on May 11, 2020. One year and six months later, the bull market ended in November 2021. The bottom was hit 517 days before halving, and the peak was reached 549 days after halving.
- The fourth halving is scheduled for April 2024. Bitcoin will hit the bottom 517 days before the halving in 2024.
- …….
Bitcoin halving still dominates the crypto cycle, and external factors often revolve around internal factors. When external factors temporarily deviate from the trend, internal factors will always pull BTC back.
After BTC halving, the time to break previous highs has also been increasing. According to normal timing, BTC should only reach the price of the previous cycle's peak, which is 68,000 USDT, by the end of 2024. However, due to the event of the Bitcoin ETF in the U.S., BTC broke through 68,000 USDT ahead of schedule.
Wall Street institutions in the U.S. took advantage of the halving effect, passing the ETF in January before the halving in April, which overextended the benefits of reduced inflation and rising prices post-halving.
There is an inaccurate statement: that the ETF is the main reason for BTC's rise in the first half of the year. The accurate statement is: The approval of the U.S. Bitcoin ETF, in conjunction with the halving pattern, is the main reason for BTC's significant rise in the first half of the year.
In the four months following this halving, BTC's poor performance is also due to internal factors (halving) at work.
External factors (ETF) often revolve around internal factors (halving). When external factors temporarily deviate from the trend (prices are too high), internal factors will always pull BTC back on track.
According to the above, if the four-year cycle pattern still holds, what will happen?
BTC will reach its historical peak around December 2025. (This figure is based on: 1. BTC reaches a peak every four years, 2. According to Phenomenon 3, the bull market after BTC halving is getting longer, peaking one year and nine months after halving.)
The highest price point for BTC will be at least around 110,000 USDT. (This is the most conservative number calculated by ChatGDP based on historical minimum and maximum data.)
The main narrative of this cycle has not yet emerged, which is a normal phenomenon.
Just as the main narrative of the last cycle, the explosive rise of NFTs, occurred less than six months before the end of the BTC bull market. One of the earliest NFT avatars, BAYC, was created in May 2021, just six months before the peak of the bull market.
An even more counterintuitive event is: Azuki, which was launched in January 2022, went live in the second month of the bear market, while the wildly popular StepN had just secured funding at that time.
During the peak of StepN and NFTs, BTC had already halved, and the bear market had quietly passed half of its duration.
