Beyond Halving: Is Bitcoin’s 4-Year Cycle Merely an Urban Legend?
A recent series of tweets by Blockchain Backer, a prominent Twitter user with a substantial following, has cast doubt on the widely believed 4-year cycle associated with Bitcoin’s Block Reward Halving.
In a thought-provoking argument, Blockchain Backer suggests that this correlation may be nothing more than an urban myth. This article explores the case put forward by Blockchain Backer, presenting an alternative perspective on Bitcoin’s price cycles.
Does Bitcoin operate on magical 4-year cycles that have to do with the Bitcoin Block Reward Halving?
Get ready to have your world flipped upside-down if you believe it does.
Because I’m about to build my case that it’s an urban myth.
— Blockchain Backer (@BCBacker) May 20, 2023
Examining the Data
Blockchain Backer presents historical data revealing the number of days it took for Bitcoin to reach its all-time high following each halving event. The figures demonstrate a pattern of increasing post-halving intervals: 92 days in 2012, 180 days in 2016, and 204 days in 2020. These findings challenge the notion of a fixed 4-year cycle dictating Bitcoin’s price movements.
The DJI Connection
Blockchain Backer also questions the timing of Bitcoin’s cycles and its potential relationship with the Dow Jones Industrial Average (DJI). By analyzing the historical movements of both Bitcoin and the DJI, Blockchain Backer identifies instances where their peaks and bull runs appear to align.
Notably, in 2012, Bitcoin reached its all-time high 92 days after the halving, coinciding with a new high in the DJI after the Great Financial Crisis. A similar correlation is observed in 2016, with Bitcoin’s peak occurring 180 days after the halving and the DJI breaking into a new all-time high within 57 days.
The Impact of Covid-19
Blockchain Backer challenges the argument that the unprecedented events surrounding the Covid-19 pandemic disrupted the expected pattern. Instead, the subsequent correction in Bitcoin’s price is characterized as a normal structure rather than an anomaly solely caused by the pandemic.
By comparing the corrective patterns observed in 2013 and the range-bound correction from 2017 to 2021, Blockchain Backer highlights similarities that support this viewpoint.
Interdependence with the Market
The alternative perspective put forth by Blockchain Backer suggests that Bitcoin’s performance may be more reliant on the stock market, particularly the DJI, achieving new all-time highs rather than adhering to a predetermined 4-year cycle.
Historical evidence indicates that Bitcoin’s previous bull runs in 2013, 2017, and 2021 coincided with the DJI breaking into new highs. Consequently, the argument proposes that future bull runs for Bitcoin may be contingent upon the performance of the broader stock market.
Blockchain Backer’s analysis challenges the commonly accepted belief in Bitcoin’s 4-year cycle. By emphasizing the increasing number of days it takes for Bitcoin to reach its all-time high post-halving and the correlation between Bitcoin’s bull runs and the DJI’s breakouts, an alternative perspective emerges.
While the existence of a mythical 4-year cycle is called into question, the influence of the stock market on Bitcoin’s future trajectory gains significance. As the debate continues, the interplay between Bitcoin and broader market forces will shape the understanding of its price movements.
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