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Key Takeaways
What can break the BTC cycle?
New dynamics from ETFs and government bond buyers have made the BTC market more mature than the typical cycle structure, according to analysts.
What’s next if the cycle is broken?
Subsequently, BTC’s momentum in 2026 could depend on the US business cycle and liquidity growth.
How did Bitcoin [BTC] reach a top and enter a bear phase without triggering historical warning signals?
That’s the question most market watchers are grappling with on Crypto Twitter (CT) after BTC fell below the key bull market support (the 365-day Daily Moving Average) during a prolonged correction.
But the warning signals set depended on the four-year BTC cycle.
What if the cycle is broken or deviates from historical patterns? In fact, Bitwise CEO Hunter Horsley and FundStrat CIO Tom Lee are now convinced that players who follow past trends will break the cycle.
Horseley noted that people sold in 2025 to avoid the expected dump of 2026, based on past patterns.
Unfortunately, this could put 2025 in the red, a historically green year after the halving, effectively breaking the cycle and potentially leaving 2026 “open” to a new regime.
“Second-order effect: 2025’s sellers are making 2025 a bad year, breaking four-year cycles. Third-order effect: 2026 is an open season. Four-year cycles are broken.”
Source: Bitwise
Lee reiterated the outlook and added,
“Compelling points, I agree that factors for BTC and ETH are shifting from the four-year cycle.”
What Really Drives BTC Cycles?
For those unfamiliar, the entire cycle theory is centered on BTC’s halving event, which happens approximately every four years.
Measured from the cycle low, the 2022 phase (black line) has delivered +600% gains, much less than other cycles. But there was a relatively close correlation, especially with the second (blue) and third (green) cycles.
Source: Glassnode
Of new playerssuch as ETFs and government bonds, which entered the market, the maturing sector was expected to experience the law of diminishing returns.
And with the changes, some have claimed that typical cycle indicators like MVRV Z-Score would no longer be able to effectively pick tops.
Source: Glassnode
In recent cycles, MVRV Z-Score peaks have marked market tops. Such a move has not yet been initiated and would make the current cycle unique if $126,000 were indeed the market peak.
Another user, Satoshi Flipper, echoed Lee and Horsley’s views, but added that the changes are the result of extended US business cycles.
In other words, the BTC cycle is closely linked to it liquidity growth than halving seasons, as previously thought.
Source:
Perhaps the year-end results and 2026 performance will prove which theory about BTC is correct and whether the four-year cycle is indeed dead.