Has the price of Bitcoin finally broken out of a four-year cycle pattern, or is this bull market already entering an exhaustion phase? By examining historical growth rates, liquidity data, and macroeconomic correlations, we can better understand whether the current cycle has truly gone awry, and what that means for investors in the coming months.
Bitcoin price cycle duration
analysis BTC growth since cycle lowsWe can see that Bitcoin has officially surpassed the time elapsed from the cycle low to the high seen in previous bull markets. The 2018-2022 cycle peaked 1,059 days after the previous bear market lows, and the current cycle has now surpassed that duration. If we average the elapsed time over the last two full market cycles, Bitcoin has already surpassed the historical average and is on the verge of surpassing the 2017 cycle length in the coming days.
Reducing the impact on the price of Bitcoin
Historically, Bitcoin’s four-year cycle has been rooted in halving events, where the block reward, and thus the inflation rate, is cut in half. Each halving triggered a sharp supply shock, sending major bull markets into overdrive. However, this cycle behaved differently. Following the recent halving, Bitcoin saw five months of sideways consolidation rather than the explosive post-halving rallies seen previously. While the price has since made notable gains, momentum has been weaker, leading many to question whether the halving has lost its impact.
downstream Rolling supply Having already exceeded 95% of Bitcoin’s total final supply of 21 million, the marginal supply decline may not be as significant. Today, miners distribute roughly 450 newly created bitcoins daily, an amount easily absorbed by a handful of institutional buyers or ETFs. This means that halving alone may not be the dominant driver of Bitcoin market cycles.
Global liquidity cycles drive Bitcoin price
When we watch Global Money Supply M2 vs. BTC On an annual basis, a clear pattern emerges. Every major bottom in Bitcoin corresponds almost perfectly to the M2 global liquidity growth trough.
If we plot Bitcoin halvings and M2 lows side by side, we see that halvings typically lag the liquidity cycle, suggesting that liquidity expansion, not halving events, may be the real catalyst for Bitcoin rallies. This is not unique to Bitcoin. Gold has exhibited the same behavior for decades, with its price performance closely mirroring the rate of global M2 expansion or contraction.
Inverse correlations that shape Bitcoin price trends
The key part of this liquidity story lies in the US Dollar Strength Index (DXY). Historically, Bitcoin vs DXY On an annual basis it was almost completely inversely related. When the dollar rises on an annual basis, Bitcoin tends to enter bear market conditions. When the dollar weakens, Bitcoin begins a new bull market. This inverse relationship also applies to gold and stock markets, confirming the broader decline cycle hypothesis that as fiat currencies lose purchasing power, hard assets rapidly rise in value.
Currently, the DXY has been in a short-term uptrend, coinciding with Bitcoin’s recent consolidation. However, the index is now approaching a key historical resistance area, an area that served as major turning points and preceded the DXY’s long declines. If this pattern continues, the next major decline in dollar strength could lead to a renewed Bitcoin bull cycle.
Quantitative tightening and the price of Bitcoin
Comments from Federal Reserve Chairman Jerome Powell He recently hinted that the era of balance sheet contraction (quantitative tightening) may be coming to an end. looking at Fed Balance Sheet vs. BTCThe beginning of balance sheet expansion and renewed quantitative easing has historically coincided with significant upward movements in both Bitcoin and equity markets.
During the two years following the previous Fed balance sheet expansions, the S&P 500 averaged a 47% return, more than five times the average two-year performance during neutral periods. If we are indeed entering a new phase of easing, this would not only prolong the current Bitcoin cycle, but could also pave the way for a liquidity-driven asset meltdown across risky assets.
Conclusion: Bitcoin’s evolving price cycle
Bitcoin has now surpassed the time frames of the previous two sessions, leading many to question whether the four-year rhythm is still in effect. But when we step back, a different narrative emerges, driven not by programmed scarcity, but by global liquidity, stock declines, and aggregate capital outflow. The “four-year cycle” may not have been broken, but it may have simply evolved.
If the US dollar weakens, the Fed pauses tightening, and global M2 growth accelerates, Bitcoin will likely have room to grow. For now, as always, the best approach remains the same: react, not predict. Be data-driven, be patient, and monitor liquidity.
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Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
The post Why The Bitcoin Price May Be Decoupling From Its Four-Year Cycle first appeared on Investorempires.com.
