The 4-Year Historical Cycle of Bitcoin May Still Be Intact

Glassnode's new analysis shows that the traditional 4-year cycle of Bitcoin remains structurally intact despite many analysts claiming that institutional adoption has broken this model. The blockchain analysis company has noted that the current cycle duration of Bitcoin and the profit-taking levels of long-term holders are similar to previous cycles, with the all-time highs in both the 2015-2018 and 2018-2022 cycles occurring 2-3 months after the current timeline. Glassnode Data Challenges the Story of "The Death of the Cycle" This analysis is in stark contrast to the recent statements made by industry figures, including CryptoQuant CEO Ki Young Ju, who claimed "this cycle is dead," and Bitwise Chief Information Officer Matt Hougan, who argued that the diminishing impact of the halving and institutional capital flows have replaced traditional models. However, Glassnode data shows that the current cycle has reached the second longest recorded time for Bitcoin supply still being above profit levels. The influx of capital into Bitcoin has significantly weakened despite reaching a new all-time high of 124,400 dollars, with the actual market capitalization growth only achieving 6% per month compared to 13% during the first breakthrough to 100,000 dollars at the end of 2024.

Meanwhile, the adoption by organizations continues to accelerate, with the giant construction group Ming Shing Group from Hong Kong recently announcing plans to purchase 4,250 Bitcoin worth 483 million dollars. This company has joined a group of 297 organizations that currently hold a total of over 3.67 million BTC, raising an ongoing debate about whether the accumulation by businesses fundamentally changes the nature of Bitcoin's cycle. Leverage And Speculation Signal The End Cycle Momentum The derivatives market continues to demonstrate a high risk tolerance, characteristic of a mature growth phase, with open Bitcoin futures contracts still maintained at $67 billion despite recent corrections.

The liquidation of 2.3 billion dollars in open contracts during the latest sell-off is among the 23 largest trading days recorded, highlighting the speculative positioning gap. Notably, the altcoin leverage also reached a new peak as the total open contracts on major cryptocurrencies surged to a record $60.2 billion before decreasing by $2.6 billion during the price adjustment. This is the 10th largest decline in the history of altcoin derivative products.

The dominance of Ethereum's derivatives products has reached a significant level, with open interest rising to the fourth largest market share in history at 43.3% compared to Bitcoin's 56.7%. More importantly, the perpetual futures trading volume of Ethereum has reached an all-time high of 67%, marking the most significant structural shift towards altcoin speculation in market history. The total liquidation volume on major altcoins reached a peak of 303 million dollars per day, double the liquidation volume compared to the Bitcoin futures market.

The liquidation events over the weekend, ranked as the 15th largest in history, are the result of increasing demand for leveraged exposure to alternative cryptocurrencies. However, Glassnode notes that the most recent contract closure appears to be voluntary rather than a forced liquidation. Short selling liquidation reached 74 million dollars during the period of forming an all-time high, while buying liquidation reached 99 million dollars in the subsequent downtrend. The Cycle Models Still Persist Despite the Integration of Institutions Glassnode's analysis also reveals that the current Bitcoin cycle has maintained supply above profit levels for 273 days, becoming the second longest recorded cycle, only after the 335-day cycle of the 2015-2018 period.

This index indicates the maturity level of the cycle corresponding to historical precedents rather than fundamental structural changes. Long-term holders have realized accumulated profits exceeding all previous cycles except for 2016-2017, indicating selling pressure consistent with the behavior of the historical final phase. This profit-taking activity aligns with the traditional cycle dynamics, where long-term holders distribute to new market participants during the euphoric phase. The volume of profit-taking has significantly decreased in an effort to reach the recent all-time high compared to previous breakouts of 70,000 dollars and 100,000 dollars. This particularly shows that the market is struggling to maintain its upward momentum despite the selling pressure from current holders having decreased. The recent acceleration of losses also reached 112 million dollars per day during the current correction, still within the typical range observed during local pullbacks throughout the bull cycle. The first Bitcoin whales have started to circulate among assets, with one holder transferring 400 BTC worth 45.5 million dollars, just today, to Ethereum on the Hyperliquid exchange before opening leveraged buy positions totaling 68,130 ETH across multiple wallets. This behavior indicates profit optimization strategies rather than rotating the underlying assets, supporting the argument that cycle models remain intact despite the expanding participant base and regulatory clarity. Technical Outlook Indicates Consolidation at Key Support Levels Market analysts view the recent pullback of Bitcoin as a strategic repositioning rather than a fundamental weakness, with NoOnes CEO Ray Youssef noting that "The pullback of Bitcoin is less related to fundamental factors and more about market participants strategically repositioning due to current market conditions." The adjustment period comes after leverage was overused following Bitcoin reaching a new high of $124,000, combined with a gradual decline in spot demand and significant unrealized profits among traders. The unexpected inflation data from the United States surprised market participants, reducing expectations for a quick rate cut and forcing Bitcoin to reprice alongside other risk assets. Youssef emphasized that "when excessive leverage encounters macro instability, establishing a healthy price is often the path of least resistance for the market." However, the fact that Bitcoin has maintained above 100,000 dollars for more than three months is particularly noteworthy. Youssef noted that "while BTC dropped to a low of $112,600, the buyers strongly defended the support zone, protecting the bullish market structure from a complete breakdown even as short-term traders unwound their positions." The technical outlook depends on whether Bitcoin can hold the important psychological support level in the range of 100,000 to 110,000 dollars, with the structural bid remaining intact above this level.

According to Youssef's analysis, "if the support area of $112,500 is held and the price recovers from there, Bitcoin is likely to consolidate in the near future before continuing to rise to previous highs and may even surpass that level." The breakdown of the decision below $112,000 could lead to a deeper pullback to the $110,000 level and potentially $105,000 if there are no new macro catalysts. Conversely, the recovery in risk appetite and expectations for increased liquidity could "quickly reignite market momentum once again," with a high likelihood that Bitcoin will "return and exceed the $124,000 level in the next market rally" as institutional demand continues to far outstrip supply.