Bitcoin's four-year cycle faces review, ETF capital inflows reshape price behavior

Bitcoin's four-year cycle model faces scrutiny: ETF capital inflows reshape price behavior

The traditional Bitcoin four-year cycle model is triggering a new round of debate among market analysts. The latest cycle shows signs of significant deviations from historical trends. According to CryptoQuant, after halving events in 2012, 2016 and 2020, bottom patterns typically formed within 770 to 900 days in previous cycles.

Record high comes before halving, breaking the historical rhythm

In this cycle, Bitcoin hit a record high before the recent halving event, an unprecedented phenomenon that has led many to question whether traditional timing laws still apply. Market participants have mixed views on this, with some believing that the shift is just a temporary anomaly, while others pointing to deeper changes in the market structure.

Bitcoin reached a historic high ahead of the current halving, challenging the inherent assumption that price increases always follow halving events. Analysts now pay close attention to macroeconomic factors and institutional capital flows as key forces driving the market cycle.

CryptoQuant's chart shows that this break in the time series is in sharp contrast to three consecutive cycles-in which the halving date was reliably followed by a long bottoming period before reaching new highs. This development has intensified the debate about whether the "halve-driven cycle" can still have the same explanatory power as it used to be.

Institutional capital inflows reshape market cycles

Spot Bitcoin exchange-traded funds (ETFs), which have been approved for trading in multiple major markets, greatly facilitate access to Bitcoin by large financial institutions. Institutional investors tend to align their asset allocations with global monetary policy, liquidity and other macro factors, rather than closely tracking specific dates in the online issuance calendar.

Unlike individual investors who used to rely heavily on closely tracking the halving schedule, the current market landscape is dominated by large investors, whose operations are guided by changes in economic policies and capital flows. This new capital structure appears to reduce the relative impact on prices of supply shocks caused by halving.

In previous cycles, reductions in issuance after each halving significantly limited available supply, driving strong price increases. Today, newly mined bitcoins account for only a small fraction of daily trading volume, as trading activity is increasingly concentrated in derivatives, over-the-counter counters and institutional funds.

As the market value of Bitcoin exceeds US$1 trillion, significant driving up prices requires strong global liquidity support, not just a reduction in issuance rates. The recent lack of aggressive central bank liquidity plans has also set the current cycle apart from previous cycles that drew strength from monetary expansion.

These factors have led some analysts to believe that Bitcoin is gradually transforming into a mature macro asset, with price movements more closely linked to overall financial markets and less correlated to the rigid four-year cycle schedule.

Mini Dictionary: CryptoQuant is a leading blockchain data analysis platform that provides real-time on-chain data and insights to help investors evaluate market patterns and behaviors.

Social media hot discussion: compressed cycle theory

On social media platforms such as X (formerly Twitter), an active discussion is also underway. Some posts suggest that Bitcoin's famous four-year model has not disappeared, but is being "compressed." An account called Discover drew attention, claiming that the bottom of the current cycle may have occurred about 650 days earlier, which is significantly shorter than the typical interval of 770 to 90 days after halving in past cycles.

Some community voices suggest this is a compression cycle, in which highs and lows occur shorter intervals than in previous years, which may pave the way for earlier record highs and a shortened market phase.

According to this theory, if the bottom and top of the recent cycle have arrived earlier than the historical timetable, then the structure may be undergoing a transformation rather than an end. Discover further speculated that the next high could occur just 350 days after the subsequent halving-an accelerating pattern compared to previous milestones separated by years.

Cycle Number of days after halving the bottom formation Historical High Time 2012-2016 Approximately 900 Days After halving 2016-2020 Approximately 770 days After halving 2020-2024 About 800 days After halving 2024-2028 Approximately 650 days *(presumed) Before Halving [TAG While some observers warn that the four-year cycle may still be influential, increasing attention is turning to broader macro indicators as potential factors in determining major bottoms and highs. As investors look to the future, the next few months will have special significance in confirming whether the compressed structure is indeed in place.