The encryption market cycle is shifting from the traditional 4-year halving model to longer cycles driven by institutions.
The cyclical nature of market fluctuations
The cryptocurrency asset market exhibits a cyclical pattern of alternating bull and bear phases, driven by capital inflow leading to price increases, followed by a retreat and consolidation after reaching a peak in sentiment, and then entering a phase of accumulation. Bitcoin operates in sync with mainstream altcoins, influenced by supply shocks, market psychology, and technological maturity. Traditional views simplify this to a four-year cycle, but in reality, macro liquidity, regulatory variables, and institutional participation are reshaping the rhythm, requiring newcomers to transcend rigid frameworks and focus on the actual conditions that trigger price increases.
The history and limitations of the four-year model
In the past, Bitcoin halving events were often accompanied by supply tightening and price explosions, forming the classic path of “halving - bull peak - bear bottom - recovery,” attracting traders to predict peaks based on this. However, just three historical data points are insufficient to lock in the future, and recent analysis shows that the cycle may extend to 5 years or longer. Expectations for peaks after 2026 are more reasonable due to external factors such as ETF funds and central bank policies changing market dynamics. Newcomers should avoid mechanically applying old patterns and instead observe the real timing of capital inflows.
Cycle signals of the institutional era
The current market has shifted from retail sentiment to institutional allocation, with exchange balances declining and large holders accumulating, signaling a medium-term upward trend. The Puell Multiple measures the ratio of miner income to realized price, with high levels warning of greed and low levels demonstrating opportunity; the Pi Cycle Indicator warns of peaks through moving average crossovers. These tools, combined with on-chain data, provide more reliable cycle assessments than pure technical analysis. Retail chasing after price increases often marks the end of a phase, while institutions quietly building positions indicate a solid bottom.
Newcomers adapt to long-term strategies
Extending the cycle provides more ample layout space, but strict adherence to position discipline is required to avoid misjudging the recovery at the end of a bear market. It is recommended to participate with 5 - 10% of funds and set a dynamic stop-loss to track weakening sentiment signals. Monitor the Federal Reserve’s liquidity and the outflow of Bitcoin from exchanges; if institutions continue to absorb, it’s appropriate to increase positions; conversely, reduce holdings when retail leverage expands. This flexible mindset is better than rigidly sticking to a timetable, allowing beginners to grasp the rhythm amidst changes.
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.
