BTC 4 YEAR CYCLEDear Traders and CryptoLovers!
Are we Bullish or Bearish?
We actually want traders to turn bearish and be in shorts because when the market goes up, as per the cycle (explained in detail below), they get liquidated, and shorts buy long.
These create bear tears. Bear tears are the SALTY goodness that pushes the market higher!
Bitcoin is currently in a pivotal stage, aligning with its 4-year cycle, during which BTC rises after 6 months of sideways accumulation.
Looking back at previous cycles, particularly in 2016 and 2020, Bitcoin showed similar patterns before major breakout rallies. In both cases, Bitcoin went through a strong bullish phase shortly after the halving event, leading to all-time highs.
We had a new ATH prior to this point in this cycle, and this is because we are potentially in wave 3 of the supercycle; for those who are aware of ELLIOTT WAVE Cycles, my idea here has been very accurate.
Bitcoin’s 4-year cycle is primarily driven by the halving event, a key feature of its protocol that occurs approximately every four years (or every 210,000 blocks). During this event, the block reward given to miners for validating transactions is cut in half. This reduction in the rate of new Bitcoin entering circulation creates a supply shock, which typically has a profound impact on Bitcoin’s price.
Here’s how the 4-year cycle works:
1. Halving Event (Supply Shock):
Bitcoin's maximum supply is capped at 21 million coins. To manage this limited supply, the halving event ensures that fewer Bitcoin are introduced over time.
The block reward started at
50 BTC in 2009, and it halves approximately every four years.
2009, 50 BTC
2012, 25 BTC
2016, 12.5 BTC
2020, 6.25 BTC
2024, 3.125 BTC
This reduction in supply increases scarcity, and as demand either remains stable or rises, the price tends to increase.
2. Phases of the 4-Year Cycle:
The halving drives the Bitcoin market through four main phases:
Accumulation Phase (Post-Crash) : Bitcoin usually experiences a bear market after a peak. During this time, investors begin to accumulate BTC at lower prices.
Pre-Halving Accumulation (Consolidation) : Prices tend to consolidate in the 1-1.5 years leading up to the halving. Investors anticipate the reduced supply, and confidence builds as the market prepares for a new bull run.
Post-Halving Bull Run : After the halving event, there’s typically a massive price surge as scarcity becomes more apparent and demand spikes from retail and institutional investors. This phase usually brings Bitcoin to new all-time highs.
Blow-Off Top and Bear Market : Once Bitcoin reaches extreme heights, there is usually a correction or "blow-off top," followed by a bear market.
The cycle resets as prices gradually stabilise, and the accumulation phase begins again.
3. Economic Principles of Supply and Demand:
The halving reduces the rate at which new Bitcoin is produced, cutting supply.
If demand remains strong or increases, the price rises sharply because fewer coins are available.
This pattern leads to predictable price movements around the halving events, fueling the 4-year cycle.
4. Investor Psychology:
Market psychology also drives Bitcoin's cyclical nature. Many investors recognise the halving as a bullish catalyst, which attracts more interest and buying activity as the event approaches.
As prices rise post-halving, media attention increases, drawing new participants into the market. This often results in an explosive bull run, followed by an inevitable correction.
Historical Context:
Bitcoin’s 4-year cycle has played out repeatedly since its inception:
2012 Halving : Preceded by a major bull run in 2013, where Bitcoin reached over $1,000 before crashing.
2016 Halving : Led to the 2017 bull market, where Bitcoin hit nearly $20,000 before the market correction.
2020 Halving : Triggered the 2020-2021 bull market, with Bitcoin reaching an all-time high of around $69,000 in November 2021.
The recent price action, especially in “Uptober,” shows that the market is waking up. Historically, this month has often been bullish for Bitcoin. With rising institutional interest, especially ETFs, clearer regulatory frameworks, and a growing awareness of Bitcoin's role as a hedge against inflation, the potential for a breakout seems stronger than ever.
If Bitcoin follows its past cycles, we may be on the verge of a significant move upward. While there's always risk involved, the cyclical nature of Bitcoin’s market structure suggests that the next rally could take us to new heights, making this a crucial time to be BUYING THE DIP! (and I don't mean hummus)
While I am seeing many say this cycle is different, I don't think it is.
And if I am wrong, I have a stop loss, and so should you! The only way to survive this market is to protect your capital.
Safe trading and cheer's to a HUGE year ahead.
♥️ Lisa
