Throughout Bitcoin’s short history, its price has experienced enormous swings to new all-time highs, followed by retracements that take back most of the gains. Studying several Bitcoin (BTC) market cycles, it becomes clear that other than the first cycle, the others are relatively consistent regarding timing.
This trend is especially true of the last two cycles, which are close to four years each from peak to peak and bottom to bottom. Some have speculated that this timing results from the Bitcoin halving that occurs approximately every four years or 210,000 blocks mined. The question now is: Is the Bitcoin four-year cycle a real phenomenon or just a coincidence? And if it is real, what will it look like in 2024 and beyond?
Dissecting Bitcoin’s Market Cycles
For clarity, this article defines a market cycle from one bear market bottom to the next.
2010 to 2011 Market Cycle
The first accurate Bitcoin price tracking occurred in July 2010. By October, Bitcoin's price started to rise and peaked on June 8, 2011, at $31.90. The price began to fall over the next five months and bottomed at $2.01 on Nov. 19, 2011. This first cycle was the shortest of all the cycles to date.
2011 to 2015 Market Cycle
Cycle No. 2 began at the 2011 bear market bottom on Nov. 19, after which the price bounced higher almost immediately. After the bounce, there was a six-month period of consolidation. After BTC broke out of the consolidation, it peaked at over $268 on April 10, 2013; a 76% drop followed that peak.
BTC recovered almost immediately and hit a bull market peak of $1,177 on Nov. 30, 2013. An 86% drop followed that peak; the bottom was hit on Jan. 14, 2015.
2015 to 2018 Market Cycle
The third cycle began at the 2015 bear market bottom on January 14. For the first 9 ½ months, the price of Bitcoin accumulated in a range of about $100. After the price of Bitcoin broke out of the accumulation range, it re-tested the range once before moving higher.
The move higher culminated in the bull market peak at just under $20,000 on Dec. 17, 2017. Once again, a price drop of 84% followed the peak and the bottom was hit almost one year later, on Dec. 15, 2018.
2018 to 2022 Market Cycle
The fourth cycle began on Dec. 10, 2018, and after about four months of accumulation, the price of Bitcoin broke out in a dramatic fashion. Over the next three months, the price of Bitcoin increased by over 200% and hit a high of $13,831 on June 26, 2019.
Over the remainder of the year, Bitcoin’s price slowly dropped but still finished up about 90% for the year. The start of 2020 saw a 45% increase in the price of Bitcoin, which peaked in mid-February. That was followed by the COVID crash, which bottomed in mid-March.
The recovery from the COVID crash was swift and eventually led to the next bull market. This bull market was reminiscent of the 2013 bull market. After pushing higher throughout much of 2020, the price of Bitcoin peaked on April 14, 2021. This peak was followed by a 55% pullback that bottomed on July 20.
Over the next month, the price of Bitcoin increased by over 134%, which led to the ultimate bull market peak on Nov. 10 at $69,000. Bitcoin’s price immediately began to drop and just over a year later, on Nov. 21, 2022, it hit what appears to be the bottom at $15,495.
Bitcoin’s (BTC) Entire Price History - Weekly Chart
By zooming out and looking at the entire price history of Bitcoin, you can calculate the timing of each market cycle. In the chart above, the green vertical lines mark the bull market peaks and the time intervals between them. The yellow dashed lines mark the bear market bottoms, with the time intervals between them.
Note the timing of the last two market cycles. They are close to a four-year cycle, from one peak to the next and from bottom to bottom. Another interesting observation is the time of year when the peaks and bottoms occur.
Other than the first peak in 2011, all the others occurred in November, December or January. Is this timing a coincidence, or is there a reason behind it?
It is also clear that with each successive cycle, the percentage increase in price for the year leading up to the halving is declining. The same pattern is evident from the halving to the following peak. Again, with Bitcoin’s short history, it is unclear whether this pattern will continue. Visually, it is easy to see the diminishing returns with each successive cycle in percentage terms.
Timing for Bitcoin Bottoms: From Halvings to Peaks
This chart shows how consistent the timing is from the bottom to the halving and from the halving to the following peak. The next halving is estimated to occur on April 18. Just for fun, extrapolating the data from the other cycles puts the next bull market peak in late October 2025.
In general, Bitcoin typically experiences halvings in the first half of the market cycle. This event could be the catalyst for growth toward new highs, which usually occur around 18 months after the halving. This is because the halving lowers the amount of new tokens created each day, which could decrease the amount of selling per day. In the past, the market may have underestimated this impact, as the price ran up in anticipation of the halving, but continued to go up afterward. In 2024, Bitcoin has experienced a larger upward trend before the halving as compared to the past two market cycles. This could mean that the market is learning from the past cycles and could be pricing in the halving.
Timing for Bitcoin Bottoms - Halvings - Peaks
This chart shows how consistent the timing is from the bottom to the halving and from the halving to the following peak. The next halving is estimated to occur on April 18. Just for fun, extrapolating the data from the other cycles puts the next bull market peak in late October 2025.
In general, Bitcoin typically experiences halvings in the first half of the market cycle. This event could be the catalyst for growth toward new highs, which usually occur around 18 months after the halving. This is because the halving lowers the amount of new tokens created each day, which could decrease the amount of selling per day. In the past, the market may have underestimated this impact, as the price ran up in anticipation of the halving, but continued to go up afterward. In 2024, Bitcoin has experienced a larger upward trend before the halving as compared to the past two market cycles. This could mean that the market is learning from the past cycles and could be pricing in the halving.
Will Bitcoin’s 4-Year Market Cycle Continue or Evolve?
Another important question is how changing investor demographics will affect the Bitcoin market cycle. Over the last couple of years, institutional investors have flocked to the asset, buying huge amounts of the token. Additionally, with the recent release of spot Bitcoin exchange-traded funds (ETFs), the number of investors has grown and more people are investing in Bitcoin than ever before.
The days of only retail investors and traders buying Bitcoin are over. Will this trend affect Bitcoin’s market cycle? As investor demographics change, the steep bear market pullbacks may become shallower. If this occurs, it will affect not only Bitcoin but also the entire crypto market cycle.
Retail buyers will come in late and panic sell when the market turns against them. As they become a smaller part of the overall investor pool, their effect on Bitcoin’s price could diminish.
Institutional investors and corporations will be more likely to hold onto their Bitcoin. The largest corporate holder, MicroStrategy Inc., has said that “Bitcoin is the exit strategy.” Together, these changes may significantly impact Bitcoin’s market cycle.
What is Bitcoin’s Current Market Condition?
Bitcoin has broken a trend during the 2024 market cycle. In the past, the halving has served as the event that helped propel Bitcoin to new highs. However, this year, the price of Bitcoin has reached new highs before the having. This is notable, as it could be an early indicator that the market cycle hypothesis could begin to unravel during the coming years and months.
These new highs before the halving could mean a few things. First, it could mean that the market is pricing in the halving sooner than in the past. Previously, the Bitcoin community has struggled to comprehend what the halving will mean for the future price. Some thought that it was priced in while others thought that it would have no impact on the price. However, the past cycles have made it clear that the halving is correlated with a run above old highs. With several cycles under traders’ belts, this instance could be the time where the halving is priced into a higher level than before, but the cycle will continue as usual, with Bitcoin reaching cycle highs in late 2025.
Another scenario is that this shows the trend fully breaking down. While there has been some variation in the past cycles, the instances surrounding the halving have been relatively uniform. So, this change in pattern could indicate that the cycle theory is less relevant today. In this case, there is no telling what will happen with Bitcoin. If the event is fully priced in, Bitcoin could trade sideways or even fall in the latter half of 2024. If this were to happen, the entire theory would have to be reexamined.
Finally, the changing market dynamics of Bitcoin, namely with spot ETFs and increased institutional adoption could be exogenous events that are propelling Bitcoin higher, but the overall trend will still hold. This could mean that Bitcoin will go even higher than the market cycle theory would predict.
This year has presented some unique circumstances for Bitcoin, with changing market characteristics. It will be interesting to see how these play out in terms of the market cycle concept.
How to Buy Bitcoin
With an understanding of the market cycles, you may be interested in purchasing Bitcoin to potentially capture the second half of a Bitcoin run. Bitcoin is available on nearly every crypto brokerage. However, with many options, it can be hard to choose a single exchange. With this in mind, Coinbase, eToro and Kraken are some of the best exchanges for those looking to purchase Bitcoin. On these sites, you can create, verify and fund an account fairly easily and most traders can begin investing within one to two business days. With a funded account, you can search for Bitcoin and execute the trade. Afterward, you will be able to find the BTC in your portfolio. You can buy BTC with small amounts of money. For instance, you can buy BTC on Kraken for as little as $10. This can make it easy for most people to get their hands on Bitcoin.
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About Caden Pok
Caden has been involved with crypto since 2018, when he began investing, trading, and mining tokens. He took part in undergraduate research studying cryptoeconomics at the University of Michigan, where he will graduate Phi Beta Kappa with a bachelor’s in economics in 2025. He is experienced with DeFi technology and multiple blockchains, currently investing in Ethereum and Bitcoin.