4-Year Crypto Cycle Broken? [Extended Cycle Evidence]

Bitcoin is likely in an extended cycle rather than the traditional four-year cycle due to significant institutional buying, declining volatility, and the diminishing impact of halvings.

• Bitcoin is likely in an extended cycle, driven by institutional demand.

• Traditional four-year halving cycle patterns are potentially broken due to market maturation.

• Investors should rethink strategies to avoid selling too early in what could be a 'higher for longer' market.

The ongoing debate in crypto centers on whether Bitcoin is currently in a traditional four-year cycle or an extended cycle, with the latter suggesting prices will go 'higher for longer'. This distinction is critical for investors' profit strategies, as a four-year cycle would imply a major market exit in Q4 2024, whereas an extended cycle would favor staying invested through 2026 despite potential local retracements. Current data, including historical top timing, institutional accumulation, and Bitcoin's reduced volatility, strongly points towards an extended cycle.

Four-Year vs. Extended Cycle

• 00:00:44 The traditional four-year cycle posits that Bitcoin's price is primarily driven by supply and demand dynamics around halving events, leading to a parabolic run-up and a blowoff top about 1.5 years after a halving, followed by a significant dump. Conversely, the extended cycle theory acknowledges the halving's initial impact but argues that its influence diminishes over time as other market forces, such as institutional adoption and macro-economic cycles, become more dominant, eventually breaking the predictable four-year pattern. The correct interpretation dictates investment strategy: exit fully in Q4 2024 for a four-year cycle, or remain invested for longer if it's an extended cycle.

Post-Halving Cycle Top Timing

• 00:04:13 Historical data shows Bitcoin topped approximately 524 days after the 2016 halving and 548 days after the 2020 halving, averaging 536 days. According to this average, if the four-year cycle holds, Bitcoin would have topped around October 8th, 536 days post the 2024 halving. However, sustained new all-time highs beyond late Q4 2024 or into Q1 2026 would strongly indicate an extended cycle, suggesting the four-year cycle is definitively broken, as this implies a longer period for price action to unfold.

Changing Buyer Dynamics

• 00:06:22 A significant shift in buyer demographics supports the extended cycle theory; institutional holdings of Bitcoin have surged dramatically, from 387,000 BTC in 2017 to 3.8 million BTC currently, with institutional wallets (holding 100+ BTC) showing a continuous '45 degree pump' since late 2024. In contrast, retail activity, measured by wallets holding 0.01, 0.1, or 1+ BTC, peaked in earlier cycles and has been declining or selling since early 2024. This indicates institutions are steadily accumulating Bitcoin, suggesting a 'buy and hold' strategy that differs from retail's tendency to 'buy the greed and sell the fear', leading to a slower, upward grinding price action.

Decreasing Volatility and Maturity

• 00:09:04 Bitcoin's historical volatility has been steadily falling since the 2017 peak and is currently at an all-time low, even as Bitcoin reaches new all-time highs. This unusual trend signifies Bitcoin's maturation as an asset, moving beyond its speculative phase into an 'ETF phase' driven by institutional money. The absence of volatility spikes concurrent with price tops, as seen in previous cycles, further supports the extended cycle hypothesis. A return of high volatility in Q4 or Q1 would be a key indicator to re-evaluate this perspective.