The cyclic volatility of Bitcoin (BTC) is a topic of great interest in the digital currency market. Understanding its cyclical theory not only helps investors make more informed decisions but also provides important references for observing the trends of the entire cryptocurrency market.

1. Basic Laws of the BTC Cycle

Halving Cycle

Basic Definition: Bitcoin experiences a halving event every four years, meaning the block rewards for miners are halved. This mechanism, designed by Satoshi Nakamoto, aims to control the supply of Bitcoin, ultimately capping the total amount at 21 million.

Price Impact: Historical data shows that the price cycle of BTC is closely related to halving events. After each halving, the market typically undergoes a bull market, with significant price increases. However, this increase does not occur immediately at the halving but starts beforehand and accelerates after the halving.

Case Analysis: The first halving occurred in 2012, with BTC's price rising from about $11 to $1,120 over the following year; the second halving in 2016 saw the price rise from $650 to nearly $20,000; the third halving in 2020 saw the price rise from around $8,500 to over $64,000. The 4th halving in 2024 saw the price rise from around $1 to a peak of $76,900.

Bull and Bear Cycles

Definition of Bull and Bear Markets: A bull market refers to a phase where market prices continuously rise, while a bear market refers to a phase where the market continuously falls.

Cycle Length: Based on historical data, each complete BTC cycle lasts about four years. Typically, the bull market lasts three years, and the bear market lasts one year.

Phase Division: A complete BTC cycle can be divided into three phases: mature bull market, bear market, and early bull market. The mature bull market typically peaks after the halving event, followed by a bear market that oscillates at the bottom for about a year, and finally the early bull market, where prices slowly recover with multiple adjustments.

2. The Internal Mechanism of the BTC Cycle

Supply and Demand Relationship

Supply Reduction: Each halving event reduces the supply of new bitcoins by half, thereby increasing the scarcity of BTC.

Demand Increase: As awareness and acceptance of BTC increase, market demand continues to grow, especially after institutional investors enter the market, leading to even stronger demand.

Market Psychology

Investor Sentiment: The emotions of market participants can change significantly at different stages of the cycle. During a bull market, optimism prevails, while during a bear market, pessimism and panic spread.

FOMO (Fear of Missing Out) Effect: During the peak of a bull market, the FOMO effect significantly drives prices up, while at the bottom of a bear market, many investors sell their BTC out of fear.

Technical Factors

On-chain Indicators: Some on-chain data, such as MVRV Z-Score, can help determine whether the market is at a top or bottom. These data reflect the overall profit and loss situation of the market and are important for predicting market trends.

Moving Averages: The crossover of the 50-day moving average above the 200-day moving average is typically seen as a signal that the market is entering a new bull market. This phenomenon has appeared multiple times in past cycles and has a high accuracy rate.

3. Future Prospects of the BTC Cycle

The Upcoming Fourth Halving

Time Point: According to calculations, the next BTC halving is expected to occur in the spring of 2028. At that time, the block reward will decrease from 3.125 BTC to 1.5625 BTC.

Expected Impact: Although previous halving events indicate that the market tends to see significant increases after halving, the market reaction this time may be different. As the market has partially digested this expectation, the actual price increase may be subdued. However, in the long run, BTC's value is still expected to continue growing.

Macroeconomic Factors

Global Economic Environment: The global economic situation also has a significant impact on the BTC market. For example, an economic recession may lead to market turbulence, thus affecting BTC's price trends.

Policy Changes: The regulatory policies of various countries regarding cryptocurrencies will also affect market performance. If a country introduces favorable policies, it may drive the market up, and vice versa.#特朗普加密政策承诺

U.S. Election: If Trump fulfills his eight major commitments to BTC, it will undoubtedly be a major positive for BTC. On November 7, BTC's price soared to 76,900 as if celebrating Trump's victory. Later, as Trump fulfills his promises, this positive sentiment will last until 2025. Additionally, the recent interest rate cut by the Federal Reserve has contributed to bullish sentiment.#BTC☀

By studying the BTC cycle, we can better understand the characteristics and operating mechanisms of this emerging asset class. Whether for investors or ordinary users, understanding cyclical theory helps make more rational investment decisions and risk management strategies. BTC has a four-year cycle, completely aligning with the Kondratiev cycle theory, consisting of recovery, prosperity, recession, and depression stages. Currently, BTC is in the prosperity stage, and from 2025 to 2028, it will experience recession anddepression phases, until entering recovery and a new cycle in 2029.