The time between halving and BTC bottoming out and peaking is more than 500 days, and it has worked for the last five times. Will this rule fail next time?
Written by Zhou Zhou, Foresight News
Is the four-year cycle driven by BTC halving still effective?
Looking back at the previous three crypto cycles: the peak of the first cycle: December 2013; the peak of the second cycle: December 2017; the peak of the third cycle: November 2021... In the previous three cycles, BTC strictly followed the four-year cycle and cycled back and forth.
Moreover, the time between halving and BTC bottoming out and peaking is more than 500 days, and it has worked for the last five times. For example, the time between this halving and the lowest point of this cycle is 517 days.
However, as BTC has fallen to 52,000 U recently, market sentiment has been low, and some practitioners believe that BTC will break the four-year cycle. The reasons include but are not limited to:
Before this round of halving, the BTC price broke through the historical high. Historically, BTC has always broken through the historical high after halving (Abnormal phenomenon 1)
Four months after each halving, BTC has performed the worst in this cycle (Anomaly 2)
The halving has a greater impact in the early stages, and the impact becomes weaker as time goes by. (Internal factors)
The influence of external macro events on Bitcoin is gradually increasing, gradually dominating BTC (external factors)
Due to internal and external factors, as well as the occurrence of multiple abnormal phenomena, practitioners have developed deep doubts about the regularity of Bitcoin's four-year cycle after the halving.
However, the above reasons are not entirely tenable. Some of them prove the effectiveness of the four-year encryption cycle.
From the perspective of phenomena, neither Phenomenon 1 nor Phenomenon 2 is a decisive phenomenon.
Anomaly 1: The reason why BTC broke through its historical high before halving was driven by events such as Bitcoin ETF and the marketâs expectations before Bitcoin halving.
Anomaly 2: Since BTCâs previous sharp rise overdrew its future, its recent decline is precisely a return to normal trend.
Three other phenomena are even more noteworthy:
Phenomenon 1: BTC reached its peak in the last cycle. Why did it still adhere to the four-year cycle driven by BTC halving even in the face of the â519 Crashâ and the âNFT Bull Marketâ?
The â519 Crashâ that occurred in 2021 due to policy reasons did not cause BTC to enter a bear market directly, but instead reached its peak again in November.
In the six months after BTC reached its peak in November, NFT prices continued to rise for another six months. This means that although Web3 is still hot and Web3 applications are still in a bull market, BTC has already entered a bear market for half a year.
These two major anomalies still failed to change BTCâs four-year cycle.
Phenomenon 2: The rule of "bear market lasts only one year" has not been broken in this cycle. The lowest point of this cycle is one year away from the highest point of BTC's previous cycle.
Phenomenon 3: The halving time is more than 500 days away from BTC bottoming out and peaking, and it has worked for the last five times
The halving time is more than 500 days away from BTC bottoming out and peaking. This pattern has not been broken since 2015, including the most recent bottoming out.
The first halving took place on November 28, 2012. A year later, on December 5, 2013, the bull run ended.
The second halving took place on July 9, 2016. One year and three months later, the bull run ended in December 2017. The bottom was reached 547 days before the halving and the top was reached 518 days after the halving.
The third halving will take place on May 11, 2020. One year and six months later, the bull run ended in November 2021. The bottom was reached 517 days before the halving and the peak was reached 549 days after the halving.
The fourth halving will take place in April 2024. Bitcoin hit bottom 517 days before the 2024 halving.
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Bitcoin halving still dominates the crypto cycle, and external factors often revolve around internal factors. When external factors temporarily deviate from the trend, internal factors will always pull BTC back.
After BTC halved, the time to break through the previous high is getting longer and longer. According to normal time, BTC should reach the price of BTC's previous cycle peak, that is, 68,000 U, by the end of 2024. However, due to the event of the US Bitcoin ETF, BTC broke through 68,000 U ahead of schedule.
Wall Street institutions in the United States took advantage of the impact of the halving and approved the ETF in January, before the halving in April, overdrawing the benefits of the lower BTC inflation rate and higher prices after the halving.
There is an inaccurate statement: ETF is the main reason for the rise of BTC in the first half of the year. The correct statement is: the approval of the US Bitcoin ETF in line with the halving rule is the main reason for the sharp rise of BTC in the first half of the year.
In the four months after this round of halving, BTC performed poorly, and it was precisely the internal factors (halving) that were at work.
External factors (ETFs) often revolve around internal factors (halving). When external factors temporarily deviate from the trend (prices are too high), internal factors will always bring BTC back on track.
Based on the above, what will happen if the four-year cycle still works?
1. BTC will reach its all-time high around December 2025. (The source of this number is: 1. BTC reaches its peak every four years; 2. According to the law of phenomenon 3, the bull market after BTC halving is getting longer and longer, reaching its peak one year and nine months after halving.)
2. The highest price of BTC is about 110,000 U. (The most conservative figure calculated by ChatGDP based on the lowest and highest data over the years)
3. The main narrative of this cycle has not yet emerged, which is normal.
Just as the main narrative of the last cycle, the explosion of NFT, was less than half a year away from the end of the BTC bull market. One of the earliest NFT avatars, BAYC, was created in May 2021, only 6 months away from the peak of the bull market.
An even more counterintuitive event is that Azuki, which was launched in January 2022, was launched in the second month of the bear market, while StepN, which has since become popular on the entire Internet, had just received financing at this time.
When StepN and NFT were at their hottest, BTC had already been cut in half, and the bear market had quietly passed halfway.
