Bitcoin has long been observed to follow a recurring four-year pattern, shaped by its unique supply mechanics and broader macroeconomic forces. Now, two years into the current cycle—exactly halfway—investors are closely analyzing historical trends, on-chain data, and market sentiment to anticipate what lies ahead. This article explores the mechanics of Bitcoin’s four-year cycle, draws parallels with past market behavior, and evaluates the potential trajectory for the remainder of this cycle.
Understanding the 4-Year Bitcoin Cycle
At the heart of Bitcoin’s cyclical behavior is the halving event, which occurs approximately every 210,000 blocks—roughly once every four years. During each halving, the block reward miners receive is cut in half, effectively reducing the rate at which new Bitcoin enters circulation. This built-in scarcity mechanism mimics hard assets like gold and plays a crucial role in shaping long-term price dynamics.
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The Stock-to-Flow (S2F) model is one widely referenced framework that quantifies this scarcity. By comparing the existing stock of Bitcoin (total supply) to its annual issuance (flow), the model estimates a "fair value" based on historical trends and analogies to precious metals. While not perfect, the S2F model has historically aligned with major Bitcoin price movements, especially following halvings.
We are now two years past the most recent halving (April 2024), placing us in the critical acceleration phase of the cycle. Historically, the year following the midpoint has seen exponential price growth as institutional adoption increases and liquidity improves. If past patterns hold, this phase could set the foundation for a significant bull run peaking in late 2025.
Lessons from the 2022 Market Crash
Two years ago, Bitcoin faced one of its most severe downturns—not due to flaws in its protocol, but because of cascading failures in centralized crypto institutions. The collapse of FTX in November 2022 triggered a wave of contagion, leading to the downfall of BlockFi, Three Arrows Capital (3AC), Celsius, and Voyager Digital.
During this period, Bitcoin dropped from around $20,000 to a low near $15,000, fueling widespread panic and skepticism about the resilience of digital assets. Yet, once again, Bitcoin demonstrated its anti-fragile nature. From those lows, it rallied over fivefold—outperforming nearly all traditional asset classes.
This recovery reaffirms a core tenet of Bitcoin investing: short-term volatility is inevitable, but long-term holders who endure bear markets are often handsomely rewarded. The 2022 crash was not a failure of Bitcoin itself, but rather a cleansing of weak actors in the ecosystem—a process that ultimately strengthened market confidence.
Investor Sentiment: A Cyclical Psychology
Beyond price charts and supply models, investor psychology plays a pivotal role in shaping each cycle. One powerful tool for measuring market emotion is the Net Unrealized Profit/Loss (NUPL) metric.
NUPL measures the aggregate unrealized gains or losses across all Bitcoin holders. When NUPL is high (e.g., above 0.75), it signals widespread euphoria—often near market tops. When it dips into negative territory, it reflects capitulation and fear—typical of bear market bottoms.
Currently, NUPL sits in the “belief” zone—indicating growing confidence without excessive optimism. This aligns with historical patterns: after the initial post-halving rally and a period of consolidation, investors begin to regain conviction. We’re likely transitioning from skepticism to cautious optimism—a psychological inflection point that often precedes strong upward momentum.
The Role of Global Liquidity
Bitcoin doesn’t exist in a vacuum. Its price is increasingly influenced by macroeconomic conditions, particularly global liquidity cycles. When central banks expand their balance sheets or lower interest rates, more capital flows into risk assets—including Bitcoin.
Historical data shows a strong correlation between Global M2 money supply year-over-year growth and Bitcoin’s price performance. Notably:
- M2 growth bottomed in 2015 and 2018—years when Bitcoin also hit cycle lows.
- In 2022, M2 contracted sharply as central banks tightened monetary policy, coinciding with Bitcoin’s bear market.
- As of 2024–2025, many economies are shifting back toward loose monetary conditions, suggesting improved liquidity support for risk assets.
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This macro backdrop reinforces the idea that we’re entering a favorable environment for Bitcoin appreciation—not just due to internal network dynamics, but because external financial conditions are aligning.
Recognizing Familiar Price Patterns
One of the most compelling arguments for cycle-based forecasting is the consistency of Bitcoin’s price trajectory across multiple cycles.
After hitting a cycle low, Bitcoin typically takes 24 to 26 months to surpass its previous all-time high. In the last cycle, it took exactly 26 months (from December 2018 to April 2021). Today, two years after the 2023 low, Bitcoin is on a nearly identical path.
Moreover, historical peaks have occurred around 35 months after the cycle low. If this pattern repeats, we could see a peak in October 2025, followed by a gradual decline into a bear market starting in 2026. That downturn would likely last about a year before the next cycle begins.
While no model guarantees future results, these recurring patterns provide a useful framework for setting expectations and managing risk.
Frequently Asked Questions
Q: What causes Bitcoin’s four-year cycle?
A: The primary driver is the halving event, which reduces new supply every four years. This scarcity effect, combined with increasing demand and macro liquidity cycles, creates predictable boom-and-bust patterns.
Q: Are we in a bull market now?
A: Yes—Bitcoin is likely in the early to mid-stage of a bull market. With two years post-halving and improving liquidity, conditions support continued upward momentum through 2025.
Q: Can the cycle be broken?
A: While possible due to regulatory shifts or black swan events, Bitcoin has followed this cycle through multiple macro shocks—including pandemics and bank collapses—suggesting strong underlying resilience.
Q: What comes after the next peak?
A: History suggests a bear market would begin in 2026, lasting about a year. Prices would consolidate or decline before setting up for the next cycle.
Q: How can I use this cycle information practically?
A: Use it as a timing guide—not a guarantee. Combine it with on-chain data, sentiment indicators, and macro trends to make informed entry and exit decisions.
Core Keywords
Bitcoin halving, four-year cycle, Stock-to-Flow model, NUPL metric, global liquidity cycle, Bitcoin price prediction 2025, on-chain analysis, macroeconomic trends
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Final Thoughts
The four-year Bitcoin cycle remains one of the most reliable frameworks for understanding long-term price behavior. Driven by supply constraints, investor psychology, and global liquidity trends, this cycle has repeated consistently despite evolving market conditions.
We are now at a pivotal juncture—halfway through the current cycle—with strong signals pointing toward continued appreciation over the next 18 months. While no single model should dictate investment strategy, combining cyclical analysis with on-chain metrics and macro insights offers a powerful edge.
As always, investors should remain vigilant, diversify risk, and avoid emotional decision-making. The cycle may be predictable—but success still depends on discipline and informed judgment.