The cyclical nature of Bitcoin: why the price rises and falls on schedule, and what changed in 2025
The Four-Year Cycle: From Accumulation to Parabolic Growth
The pattern known as the "four-year Bitcoin cycle" has become firmly entrenched in the crypto community's consciousness. This pattern, tied to halvings, has become not just an analytical tool but a psychological anchor that defines trading strategies and market sentiment.
A typical cycle begins with an accumulation phase following a deep bear market. During this period, volatility is minimal, and retail investors have lost interest. However, on-chain data shows the opposite: long-term holders and "whales" are methodically building their positions, considering the asset undervalued. This phase lasts 12–15 months.
Then a bullish trend emerges. Growth often starts even before the halving itself, as the market prices in the expectation of reduced issuance. After the block reward is halved, parabolic growth frequently follows: liquidity inflow intensifies, retail investors join in, and the price updates all-time highs. The culmination is market overheating, excessive use of leverage, and, as a result, a deep correction that washes speculators out of the market.
The Nature of Crashes: From Liquidation Cascades to Macroeconomics
Sharp crashes are an inherent feature of Bitcoin, and their causes are multifaceted. Most often, the trigger is market overheating due to excessive leverage. Even a small downward price movement triggers a cascade of liquidations: margin calls forcibly close positions, increasing pressure on quotes. A vivid example is the events of January 29, 2026, when weak reports from tech giants triggered massive liquidations in the crypto market.
Global macroeconomics plays an equally important role. The Fed's tight monetary policy, as in 2022 when Bitcoin lost over 60% of its value amid aggressive rate hikes, demonstrates a direct correlation. External shocks—the 2020 pandemic, geopolitical crises, or regulatory bans (like China's crackdown on mining in 2021)—can also crash the market within hours.
Halving: The Architecture of Scarcity and Its Evolution
The halving mechanism is a fundamental law of Bitcoin, established by Satoshi Nakamoto. Every 210,000 blocks (roughly every four years), the miner reward is cut in half, directly limiting supply. This programmed scarcity is the main driver of long-term growth, making Bitcoin akin to gold.
However, with each new halving, its impact on the market weakens. The first halving reduced issuance from 50 to 25 BTC—a shock to the market. The most recent one, from 6.25 to 3.125 BTC, no longer had such a dramatic effect. The absolute reduction in the inflow of new coins becomes less significant against the backdrop of total liquidity volume.
History of Cycles: From Mt. Gox to the Institutional Era
Each cycle has left its unique mark. 2013 was remembered for the collapse of the Mt. Gox exchange and the loss of 850,000 BTC. 2017 was the ICO mania, when thousands of tokens raised millions based solely on white papers, ending with an 84% crash after the SEC deemed most tokens to be securities. The 2021 cycle was the era of monetary stimulus, DeFi summer, and NFT mania, culminating in the bankruptcies of Terra, Three Arrows Capital, and FTX.
The current cycle, which began in 2024, is fundamentally different. The approval of spot Bitcoin ETFs in January 2024 opened the gates for institutional capital. BlackRock, Fidelity, and other giants included Bitcoin in standard portfolios. Retail activity, on the other hand, remained surprisingly modest. It was institutional investors, not the crowd, that became the main driver of growth, leading to a smoother but more sustainable price movement.
The End of the Cycle Era? An Analyst's View
The growing influence of institutions and the link to macroeconomics call into question the immutability of the four-year cycle. ETFs and corporate reserves buy on a schedule, do not overuse leverage, and reduce overall volatility. At the same time, Bitcoin is increasingly correlated with Fed policy rather than with halvings.
My professional assessment: The era of "pure" four-year cycles is likely coming to an end. Bitcoin is maturing, transforming from a speculative asset into a macro instrument. However, crowd psychology and FOMO have not disappeared. Cycles will become less pronounced but will not disappear entirely—only now their amplitude will be set not by halvings, but by global liquidity and central bank actions. Investors should get used to a new reality where "bull" and "bear" phases will be longer, and corrections—less deep but more prolonged.