A Guide to Bitcoin’s 4 year cycle

Since there are so many new people entering the space, here’s a guide that will get you up to speed on the current stage of the Bitcoin cycle and what exactly the 4 year cycle is!

**What are market cycles?**

A market cycle refers to a pattern or repeating trend that happens within a financial market. A bull market followed by a bear market is an example of a market cycle because it’s a pattern that has happened many times in the financial markets. There are many different types of market cycles but bull and bear markets are the most common. The length of market cycles will differ and won’t necessarily be the same every time. For example, if there is a bull market that lasts 6 months, the next bull market may only last 4.


**What are the stages of a market cycle?**

Typically, a market cycle will go through four different stages in order; accumulation, uptrend, distribution, downtrend.

The accumulation stage happens after prices have hit a bottom. During this, the price has become more stable and investors begin to buy again – they “accumulate”.

Then the markup stage happens, where all the buying during the accumulation stage has started to cause the price to increase. This stage usually indicates the start of a bull market.

Then the distribution stage happens where the price begins to reach its peak, where people start selling.

Finally, the downtrend stage happens, where the price has hit its peak and now starts to fall. This is the start of a bear market.


**What is the Bitcoin 4 year cycle?**

The Bitcoin 4 year cycle is very similar to the 4 stages of a market cycle, explained above. The four stages of the Bitcoin 4 year cycle are; exponential highs, correction, accumulation, and continuation. Although the Bitcoin cycle starts in a different stage, it still happens in the same order as the stages of a market cycle.


**Phase 1 – Exponential highs**

This phase is where the price of Bitcoin increases significantly, and quickly. People that have Bitcoin are experiencing euphoria and others are rushing in to buy Bitcoin because of the fear of missing out, FOMO.

People see the price of Bitcoin rising higher and more people decide to buy because they want to be a part of the increase as well. This is what pushes the price of Bitcoin continually higher. During this time the price of Bitcoin will also reach a new all-time high. This phase is the majority of the Bitcoin bull market.


**Phase 2 – Correction**

During this phase, the price of Bitcoin falls significantly from its all-time high and returns to a more reasonable price. The reason Bitcoin became over-valued was because a large number of people began rushing to buy Bitcoin after prices had already increased drastically. This phase marks the start of the Bitcoin bear market.


**Phase 3 – Accumulation**

After experiencing a large drop, the price of Bitcoin will bottom and begin to become more stable, ending the bear market. This allows people to buy Bitcoin at a significantly cheaper price than the last 2 phases, where it could be considered undervalued during this point.


**Phase 4 – Continuation**

Here Bitcoin will start to trend up again. During this, market sentiment will change as it continues its move higher, while possibly passing its last all-time high from phase 1. This phase sees the start of the Bitcoin bull market.

Below, you will be able to see a chart that shows, approximately, the different stages of the Bitcoin 4 year cycle. Here Bitcoin has been through two 4 year cycles and is entering the start of another one. Each number on the chart matches the correct phase in the cycle. Although, as Bitcoin matures as an asset over time these cycles will lengthen and eventually the 4 year cycle will increase to 5 years, or further.


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Hope you all found this helpful!

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One Comment

  1. I’m not saying this is right or wrong. But we should note that these “trends” or “patterns” are based on two, maybe three, occurrences. While there are certainly similarities between the different cycles, there are also huge differences in context. The world is simply a very different place now from four years ago.

    Recognizing patterns is important – and so is recognizing differences.



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