Is the BTC Halving Cycle Still Effective?

The BTC halving-driven four-year cycle has long been a cornerstone of Bitcoin’s market behavior. Historically, Bitcoin has adhered to this cycle with peak points in December 2013, December 2017, and November 2021. In each of these cycles, Bitcoin followed a strict four-year pattern, with halvings occurring approximately every 500 days before significant market peaks and troughs.

Recently, however, some industry experts have begun to question whether this cycle still holds. As Bitcoin’s price recently fell to $52,000, concerns have been raised about the cycle’s reliability.

The main arguments include:

1. Historical Highs Before Halving: This cycle’s halving occurred after Bitcoin had already surpassed its previous all-time highs. Historically, Bitcoin reached new highs only after the halving event.
2. Performance Post-Halving: This cycle has seen Bitcoin’s performance lag in the four months following the halving, a deviation from previous cycles.
3. Diminishing Halving Impact: The effect of halving has seemingly weakened over time.
4. Increasing External Factors: Macro events and external influences have grown in importance, overshadowing the impact of halvings.

Despite these arguments, there are reasons to believe the four-year cycle remains valid:

1. Historical Patterns: Even during notable disruptions like the “519 Crash” and the NFT boom, Bitcoin adhered to the four-year cycle. The “519 Crash” in 2021 didn’t derail the cycle, as Bitcoin reached new highs again in November.
2. Bear Market Duration: The pattern of a one-year bear market post-cycle remains consistent. The lowest point of this cycle came exactly a year after the previous peak.
3. Halving Timing Consistency: The pattern of around 500 days between halvings and market peaks or troughs has held true in the recent five cycles.

For instance:

• The first halving on November 28, 2012, saw the bull market end on December 5, 2013.
• The second halving on July 9, 2016, led to the bull market peaking in December 2017, with a 547-day low before the halving and 518 days to peak.
• The third halving on May 11, 2020, saw the bull market peak in November 2021, with a 517-day low before and 549-day peak after the halving.
• The current cycle, with the next halving on April 2024, saw Bitcoin’s lowest point 517 days prior.

Bitcoin’s halving continues to dominate the crypto cycle, with external factors often reacting to, rather than driving, the internal halving cycle. Although the impact of external factors, such as ETF approvals, has caused deviations, the core halving cycle still plays a critical role.

Looking ahead, if the four-year cycle remains valid, the following could occur:

1. Peak Timing: Bitcoin could reach its all-time high around December 2025, following the pattern of past cycles.
2. Price Prediction: The lowest price at peak might be around $110,000, based on historical data.
3. Emerging Narratives: The key narratives for this cycle may not yet have fully emerged, similar to how NFTs only gained significant traction close to the previous cycle’s peak.

In summary, while deviations and external factors have influenced Bitcoin’s performance, the four-year halving cycle remains a crucial framework for understanding Bitcoin’s market behavior.