Recent price action of Bitcoin may still be following the historical four-year halving cycle, although some market predictions suggest that increased interest from institutions may alter this pattern, according to a report from on-chain analysis firm Glassnode.
"From a cycle perspective, Bitcoin's price action also reflects patterns that have existed before," Glassnode said in a market report on Wednesday.
Signs of Bitcoin cooling down
Glassnode pointed out that several factors suggest the Bitcoin cycle may be progressing beyond what the market predicts. Profit-taking by long-term investors—those holding Bitcoin for over 155 days—is now 'comparable to past euphoric periods, reinforcing the impression of a market in the late stages of the cycle,' they noted.
Additionally, Glassnode emphasized the decrease in demand, with inflows into Bitcoin 'showing signs of fatigue.' Spot Bitcoin ETFs have recorded outflows of about $975 million in the recent four trading days, according to information from Farside Investors.
Since reaching a record high of $124,128 on August 14, the price of Bitcoin has dropped by 8.3%, down to $113,940 at the time of publication. Glassnode reported that the decrease in demand has led traders to shift to riskier bets on volatility.
"This slowing investment appetite has coincided with a wave of increased speculative positioning, as open interest in major altcoins reached a record high of $60 billion before adjusting with a decrease of $2.5 billion," they added.
If Bitcoin continues to follow the typical cycle, peaks could appear as early as October, Glassnode said, noting that in the cycles of 2018 and 2022, the peaks of the cycle were identified only two or three months after 'the current position when measured from the cycle bottom.'
Crypto analyst Rekt Capital noted in early July that if the Bitcoin cycle follows the pattern of 2020, the market could peak in October, which is 550 days after the Bitcoin halving event in April 2024.
Many executives believe that the four-year cycle has ended
However, not everyone agrees that Bitcoin is still following the four-year cycle. Some industry figures argue that the increasing number of public funds buying Bitcoin and rising demand for spot Bitcoin ETFs could lead to a different unfolding of this cycle.
On August 10, author and investor Jason Williams stated that 100 top hedge funds are holding nearly 1 million Bitcoins, indicating that this cycle is different and the four-year cycle has not yet ended. Data from BitcoinTreasuries.NET shows that publicly listed Bitcoin funds hold about $112.17 billion in Bitcoin.
Bitwise's Chief Investment Officer, Matt Hougan, stated at the end of July that the Bitcoin cycle has 'ended' and that Bitcoin is likely to see a 'growth year' in 2026.
Mr. Hougan also expressed expectations that the timing of this cycle will be different, as halving cycles are becoming less significant over time, while interest rate cycles are becoming more favorable for the cryptocurrency sector.