Is the Legendary Bitcoin 4-Year Cycle Finally Breaking? Experts Weigh In

Market Turmoil and the Four-Year Cycle

Experts suggest that some crypto traders are selling off assets because they are adhering to the classic four-year cycle rulebook. Historically, Bitcoin has followed a four-year pattern, often peaking one year after its halving event and then experiencing a significant crash. With Bitcoin reaching a then-record high of $67,000 in November 2021, many believe the cycle is nearing its end, prompting fears of an impending downturn.

Recent Price Declines and Contributing Factors

This week, the crypto market has seen notable declines: Bitcoin dropped over 9%, Ethereum fell 6%, and XRP plunged 15%, with some altcoins performing even worse. These drops follow a recent market shock triggered by President Trump's renewed trade war threats with China, which led to a record $19 billion in daily liquidations last Friday.

Analyst Insights on Trader Behavior

Matthew Nay, a research analyst at Messari, stated, "I believe some of the sell-off is due to a cohort of market participants stuck to the four-year cycle. If you look at the timing, it's almost exactly four years since we topped last cycle, and when you throw in trade war uncertainty, it allows them to defend their positions more aggressively."

Jonathan Morgan, lead crypto analyst at Stocktwits, attributed this to "mechanical selling" from traders who base their strategies on the cycle's expectations. Jasper De Maere, desk strategist at Wintermute, added, "A lot of retail still trades off that old playbook: buy before the halving, sell when it doesn’t moon. When BTC underperforms post-halving, it shakes their conviction, and you get some forced selling."

The Case for a Broken Cycle

However, many analysts argue that the four-year cycle may be breaking due to evolving market dynamics. De Maere emphasized, "But in my opinion, that strategy’s outdated. The halving just doesn’t move the needle anymore; miner rewards are tiny compared to total trading volume." Nay from Messari believes Bitcoin could return to all-time highs before the end of the year, citing factors like growing institutional adoption and the impact of ETFs and derivatives.

Cycle skeptics point to the crypto industry's maturation, with increased integration into traditional finance, the rising significance of altcoins, and reduced influence from miners on Bitcoin's supply. Morgan noted, "Back when miner rewards dictated supply, it mattered. Now, ETFs, institutional flow, and derivatives dwarf that effect."

Additional Market Influences

Beyond the cycle debate, other elements are at play, such as the recent record liquidation event and geopolitical tensions. De Maere concluded, "Personally, I think while [the four-year cycle] is an interesting concept, the core drivers once used to explain the dynamic of the four-year cycle have just become more irrelevant as BTC and our entire space matures."