Bitcoin's 4-Year Cycle and the Current Price Correction: A Deep Dive into Market Psychology and Cyclical Shifts

Bitcoin's price correction in late 2025 has reignited debates about the relevance of its traditional 4-year cycle, a framework historically tied to halving events and speculative price surges. With the cryptocurrency trading near $91,000-a 30% drop from its October peak-investors are grappling with shifting market dynamics, evolving institutional influence, and diverging psychological signals. This analysis examines the interplay between Bitcoin's cyclical patterns, the 2024 halving, and the current correction through the lens of market psychology, drawing on recent price action, fear and greed index readings, and expert commentary.

The 2025 Price Correction: A Departure from Historical Patterns

Bitcoin's recent decline has erased all of its 2025 gains, with the CoinDesk Bitcoin Price Index falling 2.36% on November 17 to $91,859.13, marking a 16.31% month-to-date drop and a 27.25% decline from its October 6 all-time high of $126,272.76 according to Bitcoin Magazine. This correction, while sharp, pales in comparison to historical drawdowns of 70-80% seen in prior cycles. Analysts attribute the downturn to macroeconomic uncertainty, including the Federal Reserve's potential rate decisions and the lingering effects of a 43-day government shutdown that disrupted key economic data.

The 2024 halving, which reduced mining rewards from 6.25 to 3.125 bitcoins, initially spurred a record high of $73,000 in March 2024-a month before the event-defying the traditional post-halving bull run pattern. This deviation underscores a broader shift: institutional adoption and macroeconomic factors now play a dominant role in shaping Bitcoin's price action. The approval of U.S. Bitcoin ETFs in January 2024, for instance, has introduced steady, long-term demand, reducing the volatility historically tied to retail-driven cycles.

Market Psychology: From Greed to Fear in a Bull Market

The Bitcoin Fear and Greed Index, a composite metric of volatility, trading volume, social media sentiment, and other indicators, highlights the psychological shift underpinning the current correction. In October 2025, the index stood at 68, signaling "greed" and reflecting optimism as prices stabilized above $67,000 according to VT Markets. By November, however, readings plummeted to 10 on November 15-the lowest level in this bull cycle-and further to 11 on November 18, with a weekly average of 26 according to Coinotag. These extreme fear readings suggest a risk-off environment, with investors rotating capital to safer assets amid macroeconomic jitters.

Notably, institutional confidence remains a counterbalance. Despite the selloff, institutional investors have announced plans to allocate $4.2 billion into Bitcoin ETFs this quarter, signaling a disciplined, long-term approach. This contrasts with the speculative frenzy of past cycles, where retail FOMO (fear of missing out) often drove parabolic price surges followed by steep corrections.

The 4-Year Cycle in a New Era: Halving's Diminishing Influence

Bitcoin's 4-year cycle, historically linked to halving events, is showing signs of evolution. The 2024 halving reduced the cryptocurrency's inflation rate from 1.7% to 0.85%, a smaller adjustment compared to earlier halvings. As Bitcoin's supply nears its 21 million cap, the supply-driven scarcity narrative is losing potency, with market behavior increasingly aligned with macroeconomic trends. For example, Bitcoin has moved in sync with the S&P 500 and Nasdaq, hitting a 0.76 correlation during periods of geopolitical uncertainty.

Experts argue that the forces driving the traditional cycle-such as speculative retail demand-are weakening. Matthew Hougan of Bitwise Asset Management notes that supportive regulation and macroeconomic conditions now play a more significant role in Bitcoin's trajectory. This shift is evident in the current correction, which, at 26%, is far milder than the 84% drawdown post-2017 or the 77% post-2021. While 30-50% corrections due to macroeconomic shocks remain possible, they are expected to be shorter and less severe according to CNBC.

Expert Outlook: A Maturing Market and Long-Term Optimism

Michael Saylor, MicroStrategy's executive chairman, has predicted Bitcoin could reach $150,000 by late 2025, citing institutional adoption and reduced volatility from derivatives and risk-management tools. His forecast assumes a 54% annualized gain from current levels, a bold but not implausible target given Bitcoin's 54% year-to-date rise. Saylor envisions a long-term trajectory of 30% annual growth, potentially propelling Bitcoin to $1 million within four to eight years according to Coinotag.

QCP Capital analysts, meanwhile, highlight that the 12- to 18-month post-halving drawdown period following the April 2024 event is nearing its end. This suggests the current correction may be nearing a bottom, with institutional demand and macroeconomic stability acting as tailwinds for a potential rebound.

Conclusion: Navigating the New Normal

Bitcoin's 4-year cycle is not dead but evolving. The 2024 halving and institutional adoption have reshaped market dynamics, reducing the volatility of past cycles while increasing Bitcoin's correlation with traditional assets. The current correction, driven by macroeconomic uncertainty and extreme fear readings, reflects a maturing market where institutional discipline and macroeconomic factors outweigh speculative retail behavior. For investors, this signals a shift from cyclical predictability to a more nuanced interplay of supply-side fundamentals and global macro trends. As the market absorbs these changes, the focus will increasingly turn to how Bitcoin integrates into diversified portfolios and navigates the next phase of its journey.