Is Bitcoin's Four-Year Cycle Changing? Insights from Post-Halving Data

Over the years, Bitcoin has followed a predictable four-year cycle, largely influenced by its halving events. However, recent data suggests that the latest cycle, beginning with the April 2024 halving, may not mirror previous patterns. As we delve deeper into this current cycle, we examine the factors influencing Bitcoin's price and whether its traditional boom-and-bust cycle is evolving.

Key Takeaways

Bitcoin has historically adhered to a four-year cycle, linked to halving events.
The latest halving in April 2024 led to a reduction in block rewards to 3.125 BTC.
Unlike previous cycles, Bitcoin's price is currently projected to remain down about 7% in its first year post-halving.
Key fundamental shifts may signal a maturation of Bitcoin, reducing the volatility typically associated with earlier cycles.
The introduction of ETFs in 2024 and consistent gains in exchange reserves indicate stronger support for Bitcoin.

Bitcoin

Understanding Bitcoin's Changing Cycle

Bitcoin Source: TradingView (BTC/USDT)

Historically, the first year following a Bitcoin halving has seen notable price gains. In the previous cycle of 2020, the halving triggered a significant supply shock, propelling Bitcoin to a 60% rally in 2021. However, this was followed by a 64% correction in 2022, where Bitcoin found its cycle low, before surging up 153% in 2023.

In contrast, this latest cycle post-April 2024 halving is showing different trends. Currently, Bitcoin's price is set to close the first year down about 7%, with less than two weeks remaining in Q4. This raises essential questions about the reliability of Bitcoin's established four-year cycle.

Emerging Fundamentals are Shaping Bitcoin's Path

BTC Source: CryptoQuant

Bitcoin appears to be breaking away from its typical four-year boom-and-bust pattern, suggesting favorable developments for investors. It seems BTC may avoid significant downturns, like the 73% decrease in 2018 or the 64% drop in 2022—both driven by market hype. Current data from CryptoQuant reveals that certain key factors are stabilizing Bitcoin's price, creating a less volatile trading environment. This limitation on sudden price swings is further seen in the increase of 140,000 BTC added to Exchange Reserves this quarter.

The introduction of Exchange-Traded Funds (ETFs) in 2024 adds an additional layer of support to Bitcoin. Combined, these trends indicate a maturation process for Bitcoin. Unlike previous cycles, where hype often dictated extreme price movements—such as the 64% decline following a 300% increase in 2020—the present scenario appears to show stronger fundamentals. This ongoing adjustment indicates that Bitcoin's current pullback resembles more a phase within a lengthy bull market, potentially signaling the onset of a Bitcoin “supercycle.”

Final Thoughts

As Bitcoin navigates this evolving landscape, the implications of its changing cycle could redefine how investors approach cryptocurrency. Understanding these shifts will be crucial in predicting future trends and making informed investment decisions.