Author: Aylo
Compiled by: Deep Tide TechFlow
First of all, it is almost impossible to sell at the cycle peak. I cannot do it, nor will I try to do so.
Cycle peaks typically occur very quickly in short-term trading charts (LTFs) and often only become apparent when reflected in long-term trading charts (HTFs).
Short-term traders focusing on short cycles may capture the cycle peak, but they have predicted and been convinced of the arrival of the cycle peak multiple times to the point where such predictions become meaningless. They are not paying attention to the broader market context.
I am still exploring the market, constantly learning. The market cycles I have experienced are not enough for me to feel like an expert, so I am just sharing my genuine thoughts and observations here.
Please draw your own conclusions based on your judgment and make your own financial decisions. I do not know any more than anyone else, and I will regularly change my views based on new data.
Arguments supporting the four-year cycle peak
Perspective on pattern recognition:
Reviewing historical charts, there is undeniably a clear pattern: December 2013, December 2017, November 2021. The four-year cycle behaves remarkably consistently, and patterns in the market tend to persist until fundamentally altered.
Reasons why this pattern may continue:
Psychological deeply rooted: the four-year cycle has been deeply embedded in the collective consciousness of the crypto market.
Self-fulfilling prophecy: This widespread awareness may trigger collaborative selling pressure, potentially combined with implicit leverage in the system (possibly DATs?).
The correlation of the halving effect: Bitcoin halving causes a supply shock, usually occurring 12 to 18 months before a peak (although in this cycle, it seems more narrative-driven than practically influential).
Occam's razor principle: The simplest explanation is often the correct one—why complicate a pattern that has already succeeded three times?
We have clearly entered the later stages of this cycle—Bitcoin has made considerable gains since the bottom. The patterns suggest that we may be approaching a peak timing window.
Opposing views on the four-year cycle peak (theory for 2026):
Perspective on fundamental changes:
I pose a simple question: Can a cycle driven by institutions really be exactly the same as the previous two cycles driven by retail investors?
I generally believe in the existence of market cycles, so I won't discuss the so-called 'super cycle' here, but I believe the cycles may be shortened or extended due to other factors.
Why this time may really be different:
Institutional behavior patterns vs. retail behavior patterns
Spot ETF capital flows and traditional exchange capital flows have created a new liquidity pattern.
Institutional systematic profit-taking is smoother and less driven by panic, while retail behavior is more volatile.
Traditional indicators may fail
We have a lot of cycle analysis tools (such as NVT, MVRV, etc.), but their historical ranges are based on retail-driven markets.
Institutional participation fundamentally changes the definition of 'overexpansion'.
Currently, Bitcoin has not even surpassed the previous cycle's peak when priced in gold—hardly a bubble state.
Revolution in the regulatory environment
The market environment of this cycle is completely different, and the clear acceptance by the U.S. and the SEC has established an institutional framework.
Previous cycles ended partly due to regulatory shocks (such as the 2018 ICO crackdown).
The risk of a systemic sudden cycle end has significantly decreased.
Macroeconomics and Fed dynamics
Federal Reserve Chair Powell's term will end in May 2026, and Trump is expected to announce a new chairperson by the end of 2025.
The dynamics of the 'shadow Fed chair' may undermine the effectiveness of current policies, while market expectations of Trump nominating a moderate chair may create preemptive buying pressure.
The new Fed chair's first FOMC meeting is scheduled for June 17-18, 2026—which could be a potential cycle catalyst.
The transition period may extend the 'Goldilocks environment' (referring to economic stability and moderate interest rates).
Historical patterns of Fed chair transitions: Reviewing past transitions can provide a compelling template for market cycles.
Stable patterns:
Both transitions exhibited similar sequences: the nomination announcement triggered a market rally that continued into the transition period, but the S&P 500's adjustments coincided exactly with the new chairman taking office.
During Yellen's transition, the S&P 500 experienced about a 6% decline from January to February 2014.
When Powell took office, the S&P 500 experienced about a 12% adjustment in February 2018.
This pattern suggests that Trump is expected to announce a new chairman nomination at the end of 2025, which could extend the bull market into the transition period, while the likelihood of significant volatility during the handover period in May to June 2026 is higher—this may coincide with the timing window of the cycle peak.
Changes in market structure
Concerns about currency devaluation: This factor is creating new demand drivers, no longer limited to traditional risk preference cycles.
Market capitalization of stablecoins as a leading indicator: steadily growing, becoming a key metric for measuring market 'dry powder' (potential purchasing power).
The sources of Bitcoin demand are more diverse: including ETFs, DATs (digital asset treasury), pension funds, etc., more extensive than previous cycles.
What could prematurely end the cycle and lead to the reappearance of a four-year cycle?
DAT leverage risk: I believe the strongest bearish factor is that the digital asset treasury companies may conduct leverage liquidation faster than expected. Major forced sellers may overwhelm buyers, changing the market structure. However, losing purchasing demand (mNAV close to 1) is different from becoming a forced seller that triggers a 'violent drop'.
Nonetheless, the loss of significant DAT purchasing power is clearly a major impact. Many speculate that this situation has already occurred, especially as the mNAV of Strategy and major ETH DAT companies has declined significantly. I am not blind to this, and neither should you be, so it is worth keeping a close eye on.
Macro risks: Renewed inflation will be a major macro risk, but I have not yet seen relevant evidence. The crypto market is now highly correlated with the macro environment, and we are still in a 'Goldilocks' state (economic stability and moderate interest rates).
Missing elements of cycle peaks
Euphoria has not yet emerged:
The market has not yet shaken off its worries, with every 5% pullback triggering predictions of a cycle peak (which has lasted for 18 months).
Lack of sustained market euphoria or consistent market consensus on the rise.
No 'explosive peak' behavior has been observed (although it is not a necessary condition).
Potential signal: If the crypto market experiences a significant rise later this year, significantly outperforming the stock market, this 'explosive peak' signal may indicate that the crypto market's cycle peak will occur earlier than expected, lasting until 2026.
Leading indicators of stablecoins
A particularly noteworthy indicator: the growth in market capitalization of stablecoins.
In traditional finance (TradFi), the growth of M2 money supply usually precedes the formation of asset bubbles. In the crypto space, the market capitalization of stablecoins plays a similar role, representing the total 'dollar' supply available within the crypto ecosystem.
Past major cycle peaks typically coincide with a stagnation of stablecoin supply 3-6 months before the cycle peak. As long as stablecoin supply continues to grow significantly, the crypto market may still have 'fuel' to drive further rises.
My current view
To be honest, I currently believe that based on existing observations, a significant cycle peak will not occur until 2026 (this is a vague view that could change quickly).
Regarding the four-year cycle, we have limited data points (only three instances), and institutional participation has brought fundamental changes to market structure. The dynamics of Fed chair transitions themselves may extend the 'Goldilocks' environment until 2025, which I believe is especially important, especially as the correlation between the crypto market and the macroeconomy reaches unprecedented heights.
In this cycle, crypto market participants' awareness of the 'four-year cycle' pattern is broader, making me think the outcome may be different. After all, when can the market public accurately predict the market? Will everyone sell assets according to the four-year cycle pattern and then collectively welcome a bountiful ending? This is clearly worth pondering.
Nonetheless, I acknowledge that the performance of the four-year cycle pattern has been very consistent, and market patterns typically persist until they are broken. The widespread awareness of this cycle among market participants could indeed lead to a self-fulfilling prophecy that ends this pattern.
As Bitcoin's dominance (BTC.D) decreases, I will continue to take profits in the overheated altcoin market, but I still hold Bitcoin and believe it will hit new highs in 2026. It is worth noting that regardless of how the broader cycle evolves, your altcoins could reach their cycle peaks at any time.
Final thoughts
The four-year cycle pattern is the strongest argument supporting a peak in 2025—this pattern has successfully run three times, and simple logic is often more persuasive. However, changes in institutional market structure, the dynamics of Fed chair transitions, and the lack of signals of market euphoria all indicate that this cycle may extend into 2026.
Many changes may occur in the coming months, so there is no need to be overly dogmatic or stubborn.
In any case, accept the fact that you cannot precisely sell at the absolute peak of the market; it is wise to formulate a systematic exit strategy.
The right investment exposure is one that allows you to sleep peacefully at night. If you have already made a decent profit, selling 'early' is perfectly acceptable.
I welcome various viewpoints, including those that differ from my own. The purpose of this article is not only to help me make decisions but also to learn and grow in a public environment.
