As I attempt to better understand crypto’s 4-year cycle to strategically time our exit from this investment, I’m diving into how these cycles unfold around the Bitcoin halving event. Each halving halves the reward for mining Bitcoin, reducing new supply and often sparking a chain reaction in price. This supply shock generally drives Bitcoin through four distinct stages: Accumulation, Uptrend (Bull Market), Distribution (Cycle Peak), and Downtrend (Bear Market). By studying each stage’s historical timing and the patterns in previous cycles, I hope to get a clearer picture of where we are in the current cycle (2020-2024) and refine our exit strategy.
1. Accumulation Phase
- Description: This stage follows the bear market low, characterised by low prices and reduced interest. Savvy investors and institutions start accumulating BTC, expecting a future bull run. This phase typically sees low volatility and gradual accumulation by long-term holders.
- Historical Timing:
- 2015: Accumulation after the 2013 cycle peak and bear market, extending until the 2016 halving.
- 2019: Accumulation following the 2017 bull market, continuing until the May 2020 halving.
- Current Cycle Timing: Q1 2023 – April 2024
- Indicators:
- Low volatility, stable price floor
- Accumulation from long-term holders
- Historically low values in indicators like the Mayer Multiple
2. Uptrend (Bull Market)
- Description: This phase typically begins after the halving event, as supply is reduced and demand picks up. Bitcoin enters a strong uptrend, driven by increased retail and institutional interest, often amplified by media coverage.
- Historical Timing:
- 2016-2017: The bull market began shortly after the 2016 halving, peaking in December 2017.
- 2020-2021: Starting post-2020 halving, the bull market saw BTC reach $69,000 in November 2021.
- Current Cycle Timing: Expected from April 2024 to 2025
- Indicators:
- Rising RSI and MACD values, indicating bullish momentum
- Increasing wallet activity and on-chain engagement
- High MVRV values as prices rise above “fair value”
3. Distribution (Cycle Peak)
- Description: The cycle top marks the final, speculative phase of the bull market, characterized by extreme optimism and FOMO. Prices reach unsustainable highs, and early investors start to take profits.
- Historical Timing:
- 2013 Cycle: December 2013, where BTC hit $1,150
- 2017 Cycle: December 2017, with BTC peaking at $19,600
- 2021 Cycle: November 2021, as BTC reached around $69,000
- Current Cycle Timing: Anticipated mid to late 2025
- Indicators:
- RSI and Mayer Multiple values entering overbought territory
- Signs of profit-taking by long-term holders
- High Puell Multiple values
4. Downtrend (Bear Market)
- Description: This phase follows the cycle peak and is marked by sharp price corrections, market capitulation, and waning interest. Prices decline as investors exit, often lasting until the next accumulation phase begins.
- Historical Timing:
- 2014-2015 Bear Market: Following the 2013 peak, BTC entered a prolonged downtrend.
- 2018-2019 Bear Market: After the 2017 bull market, BTC saw a significant drop, bottoming out in late 2018.
- 2022 Bear Market: Bitcoin fell sharply post-2021 cycle peak, reaching a low around $15,500 in November 2022.
- Current Cycle Timing: Expected in 2025-2026
- Indicators:
- Declining interest and trading volumes
- RSI values in oversold territory
- Accumulation by long-term holders, with new wallet activity decreasing
Summary of Previous Cycles and Current Cycle Timing
Bitcoin’s 4-year cycle helps investors anticipate its potential behavior over time. Here’s a summary of the timing and phases of past cycles and the projected path for the current one.
| Cycle Stage | 2013 Cycle Timing | 2017 Cycle Timing | 2021 Cycle Timing | Expected Current Cycle Timing |
|---|---|---|---|---|
| Accumulation | 2012 to March 2013 | 2015 to March 2016 | 2019 to March 2020 | Q1 2023 to April 2024 |
| Uptrend | March 2013 to December 2013 | March 2016 to December 2017 | April 2020 to November 2021 | April 2024 to 2025 |
| Distribution | December 2013 | December 2017 | November 2021 | Mid to late 2025 |
| Downtrend | January 2014 to 2015 | January 2018 to December 2018 | December 2021 to Q1 2023 | Estimated 2025-2026 |
Altcoins in the 4-Year Cycle: Ethereum and Solana
Altcoins like Ethereum (ETH) and Solana (SOL) tend to follow Bitcoin’s cycle, often peaking shortly after Bitcoin:
- Ethereum (ETH)
- 2017 Cycle Peak: January 2018, with ETH reaching around $1,420.
- 2021 Cycle Peak: November 2021, with ETH hitting approximately $4,870.
- Current Cycle: Expected to peak shortly after BTC’s anticipated top in 2025.
- Solana (SOL)
- 2021 Cycle Peak: November 2021, with SOL reaching around $258.
- Current Cycle: Solana is likely to follow Bitcoin’s cycle closely, potentially peaking in late 2025.
Conclusion
Previously, I had considered two potential exit timing scenarios for our Bitcoin investment:
- Scenario 1: Approximately 15 months after the next Bitcoin halving, which would place the exit around July 2025.
- Scenario 2: Roughly 336 days after Bitcoin surpasses its last all-time high from 2021 ($68,789).
After studying Bitcoin’s 4-year cycle more closely, I see how these scenarios align well with historical patterns. Each phase of the cycle—from the initial accumulation and uptrend stages through to the peak and downtrend—has unique markers that help signal Bitcoin’s trajectory.
Given that altcoins, like Ethereum and Solana, typically peak shortly after Bitcoin, these timing scenarios also provide insight into broader market movements. Watching the indicators associated with each stage further supports my initial ideas for timing our exit, reinforcing that our previous assumptions about a potential cycle peak in mid-to-late 2025 remain plausible. With these insights, we’re even better positioned to make informed, strategic decisions as the cycle progresses.
TheBucket 