Despite the recent serious price decline of Bitcoin (BTC), it has been claimed that this movement is in line with the four-year halving cycle frequently seen in Bitcoin’s history. According to the latest report published by research company Kaiko, corrections in the price of the asset and market behavior are in line with the four-year cycle.
Price Correction and Cyclical Behavior in Bitcoin
While the price of Bitcoin approached $126,000 in January, it retreated to the $60,000–70,000 band at the beginning of February. There was a decrease of approximately 52 percent during this period. Kaiko points out that such sharp pullbacks have also been seen in previous cycles and that this does not mean an extraordinary break in the market.
Expert Opinions and Criticisms of the Four-Year Cycle
While it has long been argued that price movements in the Bitcoin market are shaped by a halving every four years, some experts oppose this view and argue that macroeconomic dynamics and global liquidity are now more decisive. Especially recently, there have been different evaluations that this cycle is over and a five-year model is now prominent.
Some figures, including Arthur Hayes, emphasize that global liquidity is more effective in pricing and argue that classical cycles have been replaced by new dynamics. On the other hand, it is observed that the increasing interest of institutional investors and the active role of spot Bitcoin ETFs in the market increase price volatility both ways.
Market Dynamics, ETFs and DeFi Ecosystem
The demand for spot Bitcoin ETFs and the introduction of clearer regulations in 2024 have made the current cycle different from previous periods. It is stated that in the recent price drops, there was an outflow of over 2.1 billion dollars from ETFs. It is reported that this situation causes liquidity to accelerate both in the upward and downward direction.
The report highlights that decentralized finance (DeFi) infrastructure remains relatively resilient, but there is a decline in total assets locked (TVL) and staking flows. It is evaluated that market dynamics continue to be closely related to global risk appetite and US Federal Reserve policies.
Kaiko states that current price movements indicate that Bitcoin has entered the expected correction period after the halving. Moreover, considering historical data, it is stated that a stable bottom level can be formed after several unsuccessful recoveries in such a period.
According to Kaiko’s analysis, the current market dominance of stable crypto assets is around 10.3 percent. A significant decrease in funding rates and a decrease of approximately 55 percent in futures open positions are observed. These indicators reveal a significant risk aversion and deleveraging in the market.
The report also notes that Bitcoin is currently in the ordinary course of its four-year cycle. Despite the expectations of many market participants for different developments from the past, the view that the behavior to date has progressed in parallel with previous cycles stands out.
