Most analysts had ruled out the ‘4-year cycle’ for Bitcoin [BTC]saying the story was dead. Among them is James Lavish, a partner at the Bitcoin Opportunity Fund.
James Lavish on Bitcoin’s ‘four-year cycle’
James Lavish claimed last year that a liquidity cycle was driving the price, making Bitcoin’s halving cycles irrelevant. He admitted he was wrong when BTC hit a new high of $126,000. Richly said,
I thought the four year cycle was dead. I pronounced him dead last year. I was wrong
Bitcoin started to turn in the four-year cycle when prices rose above $100,000, reinforcing the story last year. Several Bitcoin OGs sitting on tens of thousands of BTC coins began selling relentlessly, monetizing all the wealth they had accumulated over the years.
Lavish said Bitcoin was the only rational exit as US debt soared to new heights, setting BTC to hit a new high in 2026.
Why liquidity always wins
When the money supply increases, the prices of everything rise, including gold, silver, Bitcoin, stocks, bonds, and real estate.
Conversely, Lavish noted that fears of wars, quantum computing and AI could drag markets down in the near term.
Lavish said this period was similar to March and April 2020, all the way into 2021 and 2022, when the market recovered after quantitative easing. That’s why liquidity always wins.
This could repeat itself if the Fed pumps billions into the money supply by buying long-term government bonds from banks.
In that regard, Lavish noted that the Fed had no choice but to print more dollars to manage debt that had doubled in a decade to about $39 trillion. The US must pay off $12 trillion in debt this year.
Therefore, they had to ensure that more US dollars entered the system. The authorities deliberately kept the dollar weak to facilitate financing.
Regarding this, Lavish said:
America’s $39 trillion debt is not a problem to solve. It is a system to maintain. More refinancing. More liquidity. A weaker dollar by design.
Can BTC Reach a New High?
Lavish noted that this Bitcoin cycle was a bit different than the rest, where corrections range between 70% and 90%. For this one, the correction was about 50%, from a high of $126,000 to about $65,000.
The charts showed that price action has reached higher levels since the potential bottom started forming in February.
The price is expected to rise to $84,000 before another significant correction takes place. Crossing this level would put $96K in sight.
Kyle Chase noted that a correction back to $65,000 cannot be ruled out. The analyst noted that if BTC were to fall within that range, traders would add more leverage before BTC reached a new high.
Final summary
- James Lavish admits that the ‘four-year cycle’ for Bitcoin is still alive.
- Lavish expected Bitcoin to hit a new high this year as the Fed pumps in more liquidity.