🤔【Is Bitcoin Cycle Theory Dead? (Review 2011-2024)]

1. Bitcoin halving and cyclical performance

Bitcoin’s mining rewards are halved every 210,000 blocks in an effort to control supply and increase scarcity. Past halving events have typically resulted in significant price increases, forming cyclical bull markets:

- 2012: Price rises from $12 to over $1,000.

- 2016: Rising to nearly $20,000 after halving.

- 2020: Prices break through all-time highs.

However, after the halving in April 2024, the market performance was not as good as expected and was significantly sluggish compared with previous cycles.

2. Current cycle performance

Price changes 144 days after halving:

- Period 1: +895%

- Period 2: +15%

- Period 3: +37%

- Period 4: -11%

From 2023 to 2024, the Bitcoin market volatility will weaken and show a more stable rising pattern. Technical indicators such as the MVRV-Z score and the 5+ Years HODL Wave indicate that more and more Bitcoins are being held for the long term, resulting in a reduction in circulating supply and weakening the market’s short-term volatility.

3. Reasons for the weakening of volatility

- Long-term holders have increased, with more than 30% of Bitcoins not changing hands in five years.

- The market matures, more funds flow in, and violent fluctuations are reduced.

- Global economic and policy changes affect price movements.

4. Conclusion

Bitcoin’s price volatility is waning, and the validity of market cycle theory is diminishing. There are more factors to consider when trading in the future and you cannot rely solely on historical cycles.