- Bitcoin’s 4-year halving cycle remains relevant but no longer aligns strictly with time-based patterns.
- Institutional demand through ETFs has significantly raised Bitcoin’s price floor, altering traditional market dynamics.
- Macro factors like the Chinese Yuan, business cycles, and Gold strength now influence Bitcoin’s trajectory more than supply/demand alone.
Michaël van de Poppe recently highlighted that while every BTC cycle has patterns, the dates don’t exactly rhyme anymore. Traditionally, investors have relied on the 4-year halving cycle to predict price peaks and lows.
Historically, BTC cycles were predictable, with notable highs in 2013, 2017, and 2021. However, the current cycle defies those assumptions. The market recently faced a 35% correction, yet analysts like Raoul Pal note this does not signal the end of the cycle.
Instead, the relationship between BTC’s price and the 4-year halving cycle is diminishing. Other factors, including macroeconomic pressures and institutional interventions, are now shaping market behavior more than the classic supply-and-demand equation.
Institutional Bitcoin ETFs Drive Market Change
A significant market change is also anticipated from institutions, especially in Bitcoin ETFs. Around $60,000 BTC has been placed in the market through Bitcoin ETFs, forcing managers to purchase the underlying BTC.
This increase in the number of bigger investors caused the BTC price to increase from the $30,000 to $40,000 region to $80,000 to $120,000, creating another support level more than 100% higher than the one before. The market structure remained the same, but bigger market factors such as high interest rates and social unrest continue to impact the level of prices.
According to experts, BTC should be viewed in context with other volatile investments, including Gold. For example, if everything seems good in the Gold market, this generally indicates that BTC should be watched closely because BTC performs well in a growing economy, but not in stressed markets.
Historical ETH/BTC Correlations Indicate Bullish Patterns
Other factors are questions about conventional cycle thinking. Historical correlations between the Chinese yuan (CNY/USD) and the ETH/BTC market indicate that with each strengthening of the yuan, the global economy generally fares well too, contributing positively to Bitcoin.
Similar bottoming patterns in past cycles in 2016 and 2019 are observed. Based on signs like PMI increase and the Copper-to-Gold Ratio indicator, Bitcoin appears to be in the middle of a larger bull market and not yet at the peak. Look-ahead factors are also indicative of further increase.
Bank of America provides investors with the option of investing up to 4% of their portfolio in spot Bitcoin ETFs, while the Clarity Act brings DeFi institutional investment opportunities. The Fed’s overnight repos and various possibilities of cutting interest rates indicate more liquidity entering the markets.
Also Read: Bitcoin (BTC) ETF Flows Surge as Vanguard Sees $1B in Early Trading
