Is Bitcoin’s Four-Year Cycle Dead?

Overview: A shifting paradigm for Bitcoin in 2025

Bitcoin’s historical rhythm — the idea that price action follows a roughly four-year pattern centered on the halving event — has guided many market participants for over a decade. That framework helped explain recurring bull runs and subsequent corrections, and it shaped portfolio timing for retail and institutional investors alike.

By 2025, however, key elements of that cycle are showing fractures. Price action following the 2024 halving has not produced the classic speculatory blow-off seen in prior cycles. Instead, Bitcoin is trading in ways that reflect deeper macro influences, evolving liquidity dynamics and the outsized role of market sentiment.

Why the four‑year cycle appears to be losing its grip

The traditional four‑year thesis rests on three core concepts: reduced issuance from halvings, periodic retail-driven speculation culminating in a blow-off top, and a renewed consolidation phase. Several developments in 2024–2025 have weakened these linkages.

• Growing institutional participation. Allocations from institutional and corporate treasuries, and productized exposure, have increased demand that is less tethered to retail timing.
• Macro drivers gaining influence. Monetary policy, liquidity provision and risk-on/risk-off rotations are exerting larger, more immediate effects on crypto prices.
• Changing market structure. Higher derivatives usage, larger spot volumes and greater cross-market linkages mean price dynamics can deviate from the simpler halving-driven model.

Evidence from 2025 price action

Following a reasonable post-halving appreciation in 2024, 2025 has produced muted peaks rather than a dramatic, fast-rising blow-off. Periods of strength have failed to kick off a broad altcoin season, which usually accompanies a speculative Bitcoin top. Instead, altcoins have experienced uneven performance, reflecting selective capital allocation rather than broad-based retail exuberance.

Liquidity correlations are shifting

Historically, global liquidity conditions have correlated closely with risk assets, including Bitcoin. When central banks eased and liquidity expanded, crypto markets often rallied; when liquidity tightened, pressure followed.

In 2025, this correlation has shown signs of weakening. Several factors contribute to that change:

• Targeted liquidity measures and differentiated policy across regions reduce the uniform impact of global liquidity shifts.
• Institutional flows into regulated custody and productized exposure mean some BTC demand is less sensitive to short-term liquidity swings.
• On-chain demand indicators — such as exchange reserves, long-term holder accumulation and miner behavior — can decouple from macro liquidity in the near term.

For investors, a faded liquidity correlation means monitoring multiple data streams — macro liquidity metrics, derivatives positioning and on-chain supply shifts — is more important than relying on a single macro gauge.

PMI and traditional economic indicators: limited but useful

Purchasing Managers’ Index (PMI) and other real economy indicators offer signals about business activity and risk appetite. When PMI prints show expansion, risk assets often benefit; contraction can prompt risk-off sentiment.

However, PMI has proven to be an inconsistent Bitcoin predictor. Reasons include:

• Bitcoin sometimes behaves like a risk-on asset and sometimes like a risk-off hedge, depending on investor framing and macro narratives.
• Monetary policy typically transmits to Bitcoin through liquidity and asset allocation channels rather than direct links to manufacturing activity.
• Short-term shifts in sentiment and crypto-native events can overwhelm the slower-moving signals from PMI prints.

That said, PMI and similar indicators remain useful as part of a broader toolkit. They can help gauge underlying economic momentum that might shape central bank decisions, risk aversion and institutional flows.

Sentiment: the dominant short-term driver

Unlike equities, which have corporate earnings as a valuation anchor, Bitcoin lacks cash flows or dividends. As a result, price discovery is heavily influenced by expectation and belief — and therefore by sentiment.

Several structural features amplify sentiment-driven moves in crypto:

• High retail participation and social media amplification.
• 24/7 global trading with no circuit breakers to cool extreme moves.
• Wide availability of leverage in derivatives markets.

Academic and market studies consistently show that sentiment indicators — search trends, social activity and news flow — explain a meaningful portion of short-to-medium-term crypto returns. In extreme phases, sentiment can dominate price behavior, producing rapid rallies or sharp drawdowns that outpace fundamental developments.

How sentiment interacts with fundamentals

What appears as sentiment often includes assessments of shifting fundamentals. Institutional adoption, product launches, regulatory clarity or macro hedging narratives all manifest through sentiment channels. Therefore, distinguishing “pure” sentiment from fundamental reassessment can be difficult in real time.

On‑chain and market metrics to watch in 2025

As traditional cycle cues lose some predictive power, on‑chain and market-specific metrics have become central to analysis. Key indicators to monitor include:

• Exchange reserves — declining balances suggest longer-term accumulation and potential supply squeeze.
• Derivative open interest and funding rates — extremes can indicate crowded leverage and short-term risk.
• Long-term holder behavior — accumulation by wallets that don’t frequently transact is a sign of durable demand.
• Stablecoin supply and flows — inflows to stablecoins can signal dry powder ready to deploy into crypto.
• Miner selling pressure — shifts in miner liquidity needs can affect sell-side supply.

Combining these metrics with macro signals provides a more nuanced view of market regimes than relying on the four‑year heuristic alone.

Implications for investors and traders

With the four‑year cycle less deterministic, market participants should adapt strategies to a more complex environment.

• Adopt multi-dimensional monitoring. Balance macro indicators with on-chain and sentiment data rather than prioritizing any single metric.
• Use risk management and position sizing. If sentiment can swing prices quickly, tight risk controls and diversified exposure matter more than ever.
• Consider time‑horizon alignment. Long-term holders may lean on fundamentals (supply dynamics, adoption), while short-term traders should track liquidity and funding rate stress.
• Stay informed on regulatory and institutional developments. Product launches, custody arrangements and flows into productized Bitcoin exposures can alter supply-demand balance.

What could restore a more predictable cycle?

A return to the classic four‑year pattern would likely require a confluence of factors:

• A renewed, broad-based retail mania that amplifies speculative flows.
• Clear and synchronized liquidity expansion globally, pushing risk assets higher.
• On-chain evidence of restricted circulating supply, such as sustained accumulation by long-term holders.

Absent those conditions, Bitcoin may instead settle into a regime where macro and institutional cycles — rather than retail-driven halving narratives — dictate the tempo of major moves.

Looking ahead: 2025 and beyond

As of 2025, Bitcoin markets reflect an asset class in transition. Increased institutional adoption, evolving product structures, and stronger links to macro cycles are changing how price moves form and persist.

For MEXC users and market participants, the changing regime underscores the importance of:

• Diversified analytics — integrating macro signals, on‑chain metrics and sentiment indicators.
• Flexible strategies — adjusting horizons and leverage based on prevailing market structure.
• Ongoing education — staying current with product and regulatory developments that affect market liquidity and access.

For those seeking a single place to access spot and derivatives markets alongside market data, visit MEXC to explore trading options and research resources: https://www.mexc.com

Conclusion

The four‑year Bitcoin cycle that served as a useful heuristic is no longer a guaranteed roadmap. In 2025, price behavior is more evidently shaped by macro liquidity, institutional flows and sentiment dynamics. That does not mean the halving is irrelevant — it still constrains issuance — but its role has become one component among many.

Investors should therefore broaden their toolkit, placing equal weight on macro developments, on‑chain supply signals and sentiment metrics. In a market that is maturing and integrating with broader financial systems, adaptability and disciplined risk management are the best defenses against unpredictable regimes.

Disclaimer: This post is a compilation of publicly available information.
MEXC does not verify or guarantee the accuracy of third-party content.
Readers should conduct their own research before making any investment or participation decisions.